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Home Q&A Forum How does a shareholders agreement work?


Shareholders Agreement


Asked on Aug 4, 2023

How does a shareholders agreement work?

I am an individual looking to start a business with several other partners. We are in the process of forming a company and want to ensure that everyone is on the same page in terms of expectations and responsibilities. We are considering a shareholders agreement, but I am unsure how it works and how it will affect our business. I would like to get a better understanding of how a shareholders agreement works and how it can be beneficial to our business.

1 Attorney answer




Answered 336 days ago

Thomas L.

ContractsCounsel verified

Business Lawyer
Licensed in Connecticut
Free Consultation

A shareholders' agreement generally provides specified outcomes on issues that require a stockholder vote. Thus, who is on the board of directors, the sale of the company, and other major issues like that. The agreement requires that the stockholders vote in the agreed upon manner to enforce the agreement.

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