A shareholders' agreement (SHA) governs relationships among shareholders and the company: board composition, reserved matters needing consent, transfer restrictions like ROFR, tag-along and drag-along, anti-dilution, information rights, exit mechanisms and dispute resolution. Key provisions should also be reflected in the Articles of Association for enforceability against the company.
Key clauses
- Board seats and quorum
- Reserved matters
- ROFR, ROFO, tag and drag
- Anti-dilution and pre-emption
- Information and audit rights
- Exit: IPO, buyback, strategic sale
Why AoA alignment matters
Courts give effect to transfer restrictions and rights more reliably when incorporated in the AoA.
Founder protections
Vesting, leaver provisions and non-compete terms balanced with investor rights.
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Get expert help →Disputes
Arbitration clauses and deadlock resolution mechanisms reduce litigation.
Frequently asked questions
Is an SHA mandatory?
No, but essential when there are multiple owners or investors.
What is drag-along?
Majority can require minority to sell on the same terms in an exit.
Is stamp duty payable?
Yes, as per state stamp law.
Can FEMA affect SHA terms?
Yes, guaranteed returns and certain exit prices for foreign investors are restricted.
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