1. What is a Shareholder’s
Agreement?
Shantanu
4th Yr.
NLU, Odisha

2. Shareholder’s Agreement (contd…)
• It is an agreement between the shareholders
of a company which outlines the shareholder’s
rights and obligations.
• It may include provisions relating to the
regulation of shareholders’ relationship, the
management of the company, ownership of
the shares and privileges and protection of the
shareholders.

3. Shareholder’s Agreement
• Objective – shareholders are treated fairly.
• It is not mandatory under Indian law.
• It is binding only on the parties to the
agreement.

4. Application
• Applicable only upon the parties to the
agreement.
• Provisions of the agreement should be
included in the Articles to make it applicable
upon the third parties.

5. Provisions (contd…)
• Appointment of directors
• Quorum requirements
• Matters which require special resolution
• Giving veto rights to certain shareholders
• Financing the requirements of the company
• Restrictions on free transferability of shares (in
pvt. companies)

6. Provisions
• Minority rights
• Defining the obligations of shareholders

7. Limitations
• It cannot contain any such provision which
may oblige the director(s) to compromise his
fiduciary duties.
• In case of a public company, a shareholder’s
agreement cannot put any restriction on the
transferability of shares.

8. Thank You