What is a shareholders' agreement?

A shareholders’ agreement is a legally binding contract made between the shareholders of a company. It is used to establish the rights and obligations of each shareholder with respect to the business and its operations. Generally, a shareholders’ agreement covers the management of the company, the roles and responsibilities of each shareholder, the duties of the board of directors, the rights of the shareholders, the divisions of profits and losses, and the shareholders’ level of involvement in the company. In the District of Columbia, a shareholders’ agreement is especially important when forming a new business. This is because the agreement legally binds the shareholders and the company together and thus creates a unified and organized entity that will be held to the agreement regardless of future changes to the company. Additionally, a shareholders’ agreement helps to protect the interests of all shareholders as they will have specified of their rights and obligations. As such, a shareholders’ agreement is an important document when it comes to business formation law in the District of Columbia. It serves to create a unified and organized business that is bound to the agreement and helps protect the interests of all shareholders. It is thus important to hire an experienced legal professional to draft and review a shareholders’ agreement.

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What is a shareholders' agreement?

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