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Shareholder’s agreement for private limited companies
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Shareholder’s agreement for private limited companies

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  • 1.  Many Private limited companies ,However very few, understand the problems they are storing up for themselves by not having a formal agreement in place to set out the ground rules for their ownership of the business, determine the powers of each shareholder or provide a method for resolving disputes between the owners.
  • 2. Ashareholdersagreement lets the membersof a company to agree arange of matters relatingto their involvement in thecompany, so that they willknow what will happen incertain circumstances,rather than there eitherbeing nothing to govern
  • 3. Some of the main issues which might be addressed in a shareholders’ agreement include: Financing of the company Management of the company Dividend Policy Share transfers Dealing with deadlock
  • 4.  Themembers of any company with more than one shareholder benefit from having a shareholders agreement to govern issues between them not only as members of the company – which can be included in the
  • 5.  Without a shareholders’ agreement it is more likely that a disagreement between the shareholders would come about, particularly if things start to go wrong. In a private company the value may be difficult to assess. the shareholders’ agreement can set a procedure and formula. If personal circumstances change or, for example, there is an age difference, one may wish to sell his/her shares, whilst the others want to carry on. The