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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 to govern their relationship. This agreement, along with the company's articles of association, sets internal rules for shareholders. The purpose is to avoid disputes in the future by pre-determining how they will be resolved. It is advisable to put a shareholders agreement in place early on, as it is easier for parties to agree on terms before the business is fully operational. This approach is quicker and more efficient than trying to address issues later on.