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A shareholder agreement is essential for companies with multiple shareholders, delineating rights, responsibilities, and decision-making processes. It should define the following six key areas: 1) Purpose, outlining shareholder rights and dispute resolution; 2) Ownership structure, detailing issued shares, ownership percentages, and transfer restrictions; 3) Decision-making procedures, specifying how company decisions are made; 4) Profit distribution, clarifying how profits are shared among shareholders; 5) Dispute resolution, outlining methods for resolving conflicts; and 6) Exit strategies, describing procedures for shareholders leaving the company. This framework ensures clear governance and minimizes conflicts.
