Important terms included in a Shareholders Agreement cover;
- The day-to-day operation of the business;
- Board Directors and their duties;
- General meetings and Board meetings;
- Dividends, Restrictions on Parties and Events of Default;
- First Right of Refusal and Drag Along; and
- Insurance, Loan Accounts and Confidentiality.
It may also include;
- Shareholder exit strategies;
- Shareholder warranties;
- Confidentiality agreements;
- Restraint of trade for directors and/or shareholders;
- Agreement specifying or limiting business activities of the company;
- Right to appoint directors and the number of directors;
- Director’s meeting procedures;
- Reporting requirements of directors and management;
- Agreement concerning financing policy;
- Dividend distribution policy;
- Personal rights/obligations of shareholders;
- Documentation of shareholders/directors loans and the right to payment of interest;
- Policies, management and procedures;
- Protection of minority shareholder interests.