A shareholders agreement is one which is also known as stockholders agreement and is an agreement is one in which mentions how the Company has to be operated. It also outlines the rights and obligations of the shareholder. Moreover, it also enlists the privileges of the shareholders and the protection of the shareholders.
What is the Shareholders Agreement
The Shareholders Agreement makes sure that shareholders are treated equally. Though this agreement is optional, something just like the bye-laws, but it is quite advisable that you get it done for the shareholders’ protection. This Shareholders Agreement is very much helpful in a corporation that has a small number of active shareholders. This agreement is much more beneficial when there are more than one shareholders in an organization. Also, this Shareholders Agreement must have the key provisions for creating a balance between the shareholder interests and the Company’s interests, which ultimately results in the prevention of the Company losses and also protects its interest.
Rights of the Shareholder
There are many rights which can be exercised by the shareholder, and which have been granted by the Company. These rights have been mentioned below:
- He has the Right to Vote
- The Shareholder can call for a General Meeting
- He can appoint directors
- He can also appoint the Company auditor
- The shareholder has the right to access the financial statements of the Company if required.
- He has the right to inspect the Company registers and books if he feels like it.