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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, rights, and obligations. This agreement, along with the articles of association, sets internal rules for the company. The purpose is to prevent disputes and provide a resolution process if needed. It is advised to establish a shareholders agreement early on, preferably when incorporating the company, to address important matters before the business is operational. This proactive approach is more efficient than dealing with disputes later on.
