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Jaspreet Potter, a solicitor at IBB solicitors, explains that a shareholders agreement is a contract between a company and its shareholders. The agreement governs the relationship between the parties, including rights and obligations of shareholders. Together with the articles of association, these contracts create internal rules for the company. The purpose is to avoid disputes in the future, with the agreement determining how disputes are resolved. It is recommended to have a shareholders agreement in place from the beginning to prevent issues later on.