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When and why a shareholders agreement? Good question, Stick around and Ill tell you. Hi everyone, Simon here from The Contract Company -Contracts thats what we do, all-day, everyday and sometimes overnight, lucky us Right, when and why do you need a shareholders agreement? Well the when, when do you need one I would say anytime you are going into business with another person. Potentially even if theyre family you should have a shareholders agreement. Why? Well, lets get into it. So a company issue shares, the owner of the shares are called shareholders. The issue is theres no contract that governs the relationship between those shareholders of the shares. And so, what you want to do, is you want to have a contract between the holders of the shares that govern a whole lot of things about you know, how much you have to pay for the shares? When you can sell the shares if theres any restraints? All that sort of stuff. And so, the only way to do that is to have a shareholders agree
