A shareholders’ agreement is a contract that regulates the relationship between the shareholders and the corporation. The agreement will detail how the corporation should run and outline the basic rights and obligations of the shareholders. In practice, the shareholders’ agreement plays an important role in a close corporation but not public companies. Commonly, the shareholders’ agreement regulates issues like voting during shareholders’ meetings, buying or selling the company’s shares, the corporation's articles of incorporation and bylaws, as well as the selection procedure for the board of directors of the corporation.
[Last reviewed in January of 2025 by the Wex Definitions Team]
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