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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, outlining their rights and obligations. This agreement, along with the company's articles of association, establishes internal rules for the company and its shareholders, aiming to prevent future disputes. If disputes do occur, the agreement dictates resolution methods. It's advisable to create a shareholders agreement early, ideally at the company’s incorporation or trading commencement, as it is simpler and more efficient to agree on these matters before the business becomes operational.