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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, intended to govern their relationship and outline their rights and obligations. Alongside the company's articles of association, this agreement establishes internal rules that shareholders must follow. Its primary purpose is to prevent future disputes and provide a framework for resolving any issues that may arise. It's advisable to create a shareholders agreement early on, ideally at the company's incorporation or initial trading phase, as it's easier to agree on these matters when parties have the time, rather than during the business's operational phase.