Shareholders Agreement

This Packet Includes:

1. Description and Instructions

2. Shareholders Agreement

Description and Instructions

Shareholders Agreement

Shareholder agreements (also known as Stockholder agreements) are contracts between some or all of the shareholders of a company in which they agree to the structure, shareholding, directors, management and control of the Company and their rights and obligations inter se.

A shareholders agreement is a supplement to the company's constitution and will generally regulate shareholders rights and regulate the management and operation policy of the company.

It is a prudent practice to have a Shareholder’s Agreement drafted when shareholder’s come together to form a company, mainly to overcome the problems which a company constitution do not cover or is silent. A company constitution do not cover issues and mechanisms to deal with rights of minority shareholders, shareholder exit strategies in the event of death, disability, retirement etc., confidentiality agreements, operation and management of business, shareholder’s warranties, dividend distribution policy etc.

A Shareholder Agreement should cover all aspects of the relationship and the mechanics by which the company is to be operated. The agreement should also protect the respective interests of the Shareholders to the agreement and outline dispute resolution provisions in the event of any disagreement between the Shareholders.

For incorporating a company in India, an application for registration should be submitted to the registrar of companies with the following documents:

1. Memorandum of Association;

2. Articles of Association;

3. a declaration signed by a person named in the articles of the proposed company as a director, manager, or secretary of the company, or by an advocate of the Supreme Court or High Court, or by an attorney entitled to appear before the High Court, or by a chartered accountant practicing in India stating that all the requirements of the Companies Act 1956 and the applicable rules with respect to the registration and other matters have been complied with;

4. a list of persons who have consented to act as directors of the company.

5. if the proposed company is a public company, consent of very person prepared to act as a director must be submitted in a prescribed form;

6. information about directors, managing directors and managers and secretary must be submitted in a prescribed form;

7. information about the registered office in a prescribed form;

8. power of attorney in favor of one of the promoters or any other person, authorizing him/her to make corrections in the documents submitted to the registrar of the companies, if it becomes necessary; and

9. applicable registration fee payable to the registrar of the companies.

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