What is Shareholder Agreement?
Shareholder Agreement
A Shareholder Agreement is a contract between the shareholders of a startup that outlines voting rights, transfer restrictions, and board seats.
Why It Matters for Startups
Governs the legal rights and ownership distribution of the entity; configuring Shareholder Agreement is critical for managing long-term cap table health and alignment during founder equity agreements and investor alignment planning.
Detailed Deep Dive
A Shareholder Agreement defines the relationship between equity owners. By outlining transfer restrictions and voting rules, it protects the startup's cap table and aligns stakeholder expectations.
Frequently Asked Questions
Q:What is included in a shareholder agreement?
Right of first refusal (ROFR), drag-along and tag-along rights, and board representation rules.
Q:When is a shareholder agreement executed?
It is signed by founders at incorporation and updated during priced funding rounds.
Quick Facts
- CategoryLegal
- Key ApplicationFounder equity agreements and investor alignment planning
Coverage Trend12 Weeks
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