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What is a Shareholder’s
    Agreement?


                     Shantanu
                     4th Yr.
                     NLU, Odisha
Shareholder’s Agreement (contd…)
• It is an agreement between the shareholders
  of a company which outlines the shareholder’s
  rights and obligations.
• It may include provisions relating to the
  regulation of shareholders’ relationship, the
  management of the company, ownership of
  the shares and privileges and protection of the
  shareholders.
Shareholder’s Agreement
• Objective – shareholders are treated fairly.
• It is not mandatory under Indian law.
• It is binding only on the parties to the
  agreement.
Application
• Applicable only upon the parties to the
  agreement.
• Provisions of the agreement should be
  included in the Articles to make it applicable
  upon the third parties.
Provisions (contd…)
•   Appointment of directors
•   Quorum requirements
•   Matters which require special resolution
•   Giving veto rights to certain shareholders
•   Financing the requirements of the company
•   Restrictions on free transferability of shares (in
    pvt. companies)
Provisions
• Minority rights
• Defining the obligations of shareholders
Limitations
• It cannot contain any such provision which
  may oblige the director(s) to compromise his
  fiduciary duties.
• In case of a public company, a shareholder’s
  agreement cannot put any restriction on the
  transferability of shares.
Thank You

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What is a shareholder’s agreement

  • 1. What is a Shareholder’s Agreement? Shantanu 4th Yr. NLU, Odisha
  • 2. Shareholder’s Agreement (contd…) • It is an agreement between the shareholders of a company which outlines the shareholder’s rights and obligations. • It may include provisions relating to the regulation of shareholders’ relationship, the management of the company, ownership of the shares and privileges and protection of the shareholders.
  • 3. Shareholder’s Agreement • Objective – shareholders are treated fairly. • It is not mandatory under Indian law. • It is binding only on the parties to the agreement.
  • 4. Application • Applicable only upon the parties to the agreement. • Provisions of the agreement should be included in the Articles to make it applicable upon the third parties.
  • 5. Provisions (contd…) • Appointment of directors • Quorum requirements • Matters which require special resolution • Giving veto rights to certain shareholders • Financing the requirements of the company • Restrictions on free transferability of shares (in pvt. companies)
  • 6. Provisions • Minority rights • Defining the obligations of shareholders
  • 7. Limitations • It cannot contain any such provision which may oblige the director(s) to compromise his fiduciary duties. • In case of a public company, a shareholder’s agreement cannot put any restriction on the transferability of shares.