Shareholder Agreements

A shareholder agreement in a startup is a legally binding contract that outlines the rights, responsibilities, and obligations of shareholders. It helps prevent disputes, ensures smooth governance, and protects investor interests.

Key Components of a Shareholder Agreement

  1. Ownership Structure – Defines the percentage of shares held by each shareholder.
  2. Voting Rights & Decision-Making – Establishes how major decisions are made and the voting power of shareholders.
  3. Share Transfer Rules – Specifies conditions for selling or transferring shares, including pre-emptive rights.
  4. Dividend Policies – Determines how profits are distributed among shareholders.
  5. Drag-Along & Tag-Along Rights – Protects minority shareholders in case of a company sale.
  6. Exit Strategies – Outlines procedures for shareholders leaving the company.
  7. Dispute Resolution – Provides mechanisms for resolving conflicts among shareholders.

Why Shareholder Agreements Matter

  • Investor Protection – Ensures fair treatment of investors.
  • Founder Stability – Prevents ownership conflicts among co-founders.
  • Legal Compliance – Helps startups adhere to corporate governance laws.
  • Business Continuity – Establishes clear rules for ownership changes.

Written by Swedish Ventures, Rolf Olsson. Remarks to this article could be sent to glossary@swedishventures.se

ASO: DD-02-02

ASO IDDD-02-02