What is a shareholder agreement?

A shareholder agreement is a legal document that sets out the rights and responsibilities of shareholders in a corporation. It is an important document, as it serves as a contract between shareholders - all of which have an interest in the business. It gives the shareholders the ability to protect their investments and agree on what is best for the company. In California, a shareholder agreement is governed by Corporations Code, which outlines the responsibilities and rights of each shareholder and the company. Generally, the agreement outlines the percentage of shares held by each shareholder, as well as the distribution of profits among shareholders. It also defines the responsibilities of the board of directors and management. The agreement also covers how decisions are made, how disputes are resolved, and the procedure for the sale of shares. It also defines how shareholders can transfer their shares and how the company can be dissolved. In short, a shareholder agreement is a legally binding document that sets out the rights and responsibilities of all shareholders. It can help to ensure that the company is run in the best interests of all shareholders and provide protection and security for their investments.

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What is a shareholder agreement?

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