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Shareholder Agreement

Shareholders are the investors who are the true owners of the company, as it is established using the funds they contribute. The Shareholders Agreement is a formal contract between the company and its shareholders. This agreement outlines the rights and obligations of each party, as well as their respective responsibilities and entitlements in various situations involving the company and its shareholders.

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Why Should I Use Auriga Accounting For Shareholder Agreement ?

Auriga Accounting has a team of registration experts who can provide complete guidance to register your Shareholder Agreement.

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Our team of experts will get in touch with you and collect all necessary documents and details

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We fill out and file your application for Shareholder Agreement

Complete your Agreement

Ready Your Shareholder Agreement

Why Should I Use Auriga Accounting For Shareholder Agreement ?

Auriga Accounting has a team of registration experts who can provide complete guidance to register your Shareholder Agreement.

book appointment

Our team of experts will get in touch with you and collect all necessary documents and details

Resolve all your queries

We fill out and file your application for Shareholder Agreement

Complete your Agreement

Ready Your Shareholder Agreement

Overview - Shareholder Agreement

A Shareholders’ Agreement in India is a legally binding contract entered into by the shareholders of a company. It delineates the rights, duties, and obligations of each shareholder, and sets forth comprehensive guidelines governing the management and operation of the company. This agreement serves as a crucial instrument to ensure clarity, protect shareholders’ interests, and facilitate smooth corporate governance.

A Shareholders’ Agreement defines the fundamental rights and obligations of the shareholders and the company. It establishes the relationship between the members and the company as an independent legal entity. This agreement is entered into by the shareholders and the company to clearly outline their respective rights, responsibilities, and liabilities.

Benefits of Shareholder Agreement

  1. The Shareholders Agreement safeguards the rights of all shareholders, especially small shareholders, by clearly defining the roles and protections for minority shareholders.

  2. It grants minority shareholders the right to purchase shares from majority shareholders, ensuring fair opportunities for ownership stake adjustments.

  3. The agreement establishes a legal relationship between shareholders and the company, providing a foundation for setting, amending, and enforcing rules and guidelines.

  4. It clarifies the position and status of shareholders within the company, outlining their rights and obligations to ensure transparency.

  5. The agreement specifies any restrictions imposed on shareholders, offering clarity on permissible actions and limitations.

  6. As a confidential and private document, it maintains the privacy of the terms and conditions agreed upon by the shareholders and the company.

  7. It serves as a framework for resolving disputes that may arise between the company and its shareholders or among the shareholders themselves.

  8. The agreement protects shareholders and their investments, ensuring their interests are safeguarded within the company’s governance structure.

Purpose of a Shareholder Agreement

  1. Safeguard the Rights of All Shareholders: This entails respecting both majority and minority shareholders’ rights and ensuring they have a say in the company’s decisions.

  2. Define Operational Procedures Clearly: The agreement sets out the procedures for making key decisions, transferring shares, and resolving disputes to promote transparency and consistency.

  3. Harmonize Shareholder Expectations: It ensures that all stakeholders share a common understanding of the company’s goals and objectives, thereby minimizing misunderstandings and potential conflicts.

Clauses in Shareholder Agreement

Rights of Shareholders: The rights of shareholders are primarily outlined in the shareholders’ agreement. This agreement also specifies their responsibilities, which typically include overseeing the management of the company’s daily operations.

Special or Preferential Rights: Any special rights granted to shareholders, such as board representation or voting privileges, are detailed in the shareholders’ agreement. Additionally, preferential rights related to the sale or transfer of shares are outlined here.

Transfer of Shares: This section specifies the conditions under which shares may be transferred or restricted. It also covers any required approvals or consents necessary for share transfers.

Remuneration: This clause defines the remuneration or benefits entitled to shareholders, detailing the specific compensation or dividends they may receive.

Provisions for Breach: This section addresses the consequences and remedies related to breaches of the shareholders’ agreement. It outlines procedures and penalties applicable if any party fails to comply with the agreement’s terms.

Confidentiality: All shareholders are required to maintain the confidentiality of sensitive company information. This provision ensures that any proprietary or confidential information provided by the company remains protected from disclosure.

Procedure for Drafting a Shareholders Agreement

  1. Identify Critical Matters: Collaboratively discuss and determine the key issues that must be addressed in the agreement.

  2. Obtain Legal Counsel: Engage a qualified corporate lawyer to review the agreement, ensuring it is legally robust and customized to your company’s requirements.

  3. Negotiate and Agree on Terms: All shareholders should thoroughly review, discuss, and negotiate the terms to achieve mutual consensus.

  4. Finalize and Execute: After reaching agreement, prepare the final version in writing and obtain signatures from all shareholders to formalize the agreement.

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MD SAHIL
MD SAHIL
2023-06-10
Auriga Accounting is right CA firm is crucial for the financial health of our business. Auriga Accounting is reputable firm with experienced professionals, strong technology infrastructure, good communication, and transparent pricing.
Prince Kushwaha
Prince Kushwaha
2023-06-10
Workplace must be peaceful and be active during work , the Auriga Accounting Private Limited provides relevant and necessary things so employees save their time and complete their task before time period effectively and efficiently
Prince Singh
Prince Singh
2023-06-10
Auriga accouting private limited and it's team provide best service at affordable price. I have done my previous year GSTR and ITR they did it before the time
Priyanka Kumari
Priyanka Kumari
2023-04-07
They are best coordination with me. Time to time inform me how to work and what work is my pending. Time to time updated me about my company profile work like ROC Filling last date, GST filling last date, ITR etc... I have no paid any penalty since I started working with Auriga..
Vishal Singh
Vishal Singh
2023-04-07
Best company for providing services, I recommended to all. They give me the best rate of price and finished work before the time.
Sameer khan
Sameer khan
2023-04-07
The auriga accounting private limited is a reliable and a customer support company the team has give Clear answer towards the customer by which the customer cannot get confused and get necessary detail to solve their queries and auriga provided me good service and delivered my work on time very well coordinate with me and talk very well I suggest if you have any work then call auriga they will definitely finish your work on time
Vivek Shakya
Vivek Shakya
2023-04-07
Great Services , within affordable rate and give full satisfaction on works. Easy to Cordinate, I have done My Previous year ITR , Startup Registration. I am very happy with their services and their first priority is their Customer.
find way
find way
2023-04-06
I'll give a five-star rating, I had doubts about how to start my work in the field of business and they guide me and instruct me on how to start a business. They have a great team.
623 Anjali
623 Anjali
2023-04-06
The Auriga has great services. Efficient communication and really easy way to get help and support.
Anjali Sharma
Anjali Sharma
2023-04-06
Auriga Accounting team represents the highest level of customer services I have experienced.The team gives accurate information and responses to queries very fast, which are customer is facing.

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