Shareholders Agreement: 2 shareholders

SHAREHOLDERS AGREEMENT – 2 SHAREHOLDERS

Summary
This Shareholders Agreement may be considered for the mutual protection of shareholders in a private company, and strives to ensure that both the shareholders understand their respective rights and obligations in relation to each other. 

Note: When Shareholders sign a Shareholders Agreement, a working knowledge of the Companies Act is required and an expert’s advice should be sought.

More information
Why do I need a Shareholders Agreement?
A Shareholders Agreement, amongst other things strives to set out the procedure to be followed if a shareholder wishes to sell his/her shares, if there is a deadlock in the decision-making, if a shareholder is sequestrated or commits a breach, and policies regarding loan accounts.

What type of business should use a Shareholders Agreement?
If your business is a private company with two shareholders, this Agreement may be considered for use between the shareholders. 

What does the Shareholders Agreement say?
The Agreement consists of:

• Definitions and Interpretation
• Introduction
• Articles of Association
• Working Capital
• Loan Accounts and Indebtedness
• Guarantees
• Directors
• Shareholders
• Matters requiring Unanimous Consent
• Value of Shares
• Sale of Shares
• Come Along
• Tag Along
• Transfer of Shares to Family
• Forced Sales
• Notices
• Confidentiality
• General

What does the Shareholders Agreement look like?

• The agreement can be printed onto eight A4 pages.

What do you need to do to use the Shareholders Agreement?

• Read the document to ensure that it suits your requirements. Complete the requisite sections, making changes as required.
• Ensure both the shareholders sign the Agreements with each shareholder getting a copy of the final, signed agreement.

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