Shareholders Agreement

Shareholders Agreement

This Shareholders Agreement (hereinafter referred to as the “Agreement”) is entered into effective as on [Date]


By and Between


[Company Name] (hereinafter referred to as “Company”), whose principal place of business is at [Address], and;


[Shareholder Name] (hereinafter referred to as the “Shareholder”), residing at [Address],


The Company and the Shareholder are collectively referred to as the “Parties” and “Party” individually.


WHEREAS the Shareholder hereto agrees to jointly manage the Company and incorporate under the laws of [Law]


AND WHEREAS the Shareholder is entering into this Agreement to provide management and control of the Company


NOW, THEREFORE, it is hereby agreed between the Parties as follows:

Terms and Conditions

1. Operations

The Company shall be structured, organized by the terms and conditions of this Agreement and the Memorandum of Association (MOA), Articles of Association (AOA) of the Company. 

2. Share Capital

The authorized share capital of the Company is [Amount] [Amount in words], equity share of [Amount] each. There shall be no further issue of capital without the consent of the Shareholder and shall be agreed upon mutually in writing.

3. Directors

The Board of Directors of the Company shall consist of [Directors]. The Shareholder shall have the right to nominate two additional directors onto the board. 

4. Voting

The Shareholder shall jointly and severally vote and act as a member of the Company with regards to the shares of the Company.

5. Auditor

The Auditor of the Company shall be [Name of the Auditor]. The Auditor shall not be changed without the prior consent of the Shareholder and the Directors. 

6. Right of First Refusal

The Shareholder shall have a right of first refusal to purchase shares if the following events occur:


1. New shares are issued by the Company;

2. Any shares are sold or otherwise transferred or disposed of by any Shareholder (other than the existing Shareholders).

7. Non-Competition

The Shareholder shall not, at any time during the [Number of Years] period immediately following the closing date, directly or indirectly, own, manage, control, participate or be related or otherwise affiliated in any manner with, any business similar to that engaged in by the Company in the territory of [Name of Territory] without the prior written consent of the Company.

8. Termination

This Agreement shall come into effect as on the date mentioned above and shall remain in full force unless terminated by the following:


If either Party declares insolvent or bankrupt

The Company is dissolved or wound up

If the Shareholders commit a breach of any of the terms of provisions

9. Transfer of Agreement 

This Agreement is confidential and shall not be transferred to any Party without prior written consent.

10. Indemnification

The Shareholder agrees to indemnify the Company against any claim, damages, cost, loss, or any kind of liability arising in and out of this Agreement.

11. Arbitration

In the event of any dispute arising in and out of this Agreement between the Parties, it shall be resolved by Arbitration. There shall be [Number of Arbitrators] Arbitrators which shall be appointed by [Party Name]. The venue of Arbitration shall be [Venue/Location of Arbitration] and the seat shall be [State]. The Arbitrators’ decision shall be final and will be binding on both the Parties.

12. Miscellaneous

Notice: All the approvals notices required hereto by either of the Parties shall be deemed to be given and delivered by international courier or registered email respectively. 

Severability: In the event, any provision of this Agreement is deemed to be invalid or unenforceable, in whole or part, that part shall be severed from the remainder of this Agreement and all other provisions shall remain in full force and effect as valid and enforceable.

Governing Law: The Parties agree that this Agreement shall be governed by the laws of [State]. In the event the Parties do business in different states, this Agreement shall be governed by the laws of [State].

Entire Agreement: The Parties acknowledge that this Agreement sets forth and represents the entire Agreement between both Parties. If the Parties are willing to change/add/modify any terms, they shall be in writing and signed by both Parties.

Acceptance and Signature

IN WITNESS THEREOF, the Parties agree to the terms and conditions set forth above as demonstrated by their signatures as follows:

Company Shareholder

Signature

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