Contact us, your florida business attorney, to help you understand the difference between the share purchase agreement and the shareholder agreement and help you execute them. One of the differences between the share subscription contract and the shareholders` agreement is that the shareholder agreement is more detailed. The share subscription contract is usually simple and simple, but it can sometimes contain detailed conditions on guarantees and compensation for shareholders. Shareholders` agreement – The shareholders` agreement is the agreement between the company and the shareholders. It can be drafted between a specific part of the shareholder and the company or any shareholder of the company. The shareholders` agreement describes the rights and obligations of shareholders, regulates the sale of shares, protects shareholders (especially minority shareholders) and the company on how the company`s important decisions will be made and how it will operate. The appointment of directors and quorum requirements, the definition of matters requiring special decision-making or the granting of veto rights to certain shareholders, the financial needs of the company, the restrictions of the right, the free transfer of shares, the definition of the obligation of each of the shareholders towards the company. The agreement talks about the right of minority shareholders. It defines the rights of shareholders, what responsibilities, privileges and protections it has.
Under Indian law, a shareholders` agreement is not mandatory, but it is mandatory, as it is a contractual agreement. Minority shareholders are shareholders who hold less than 50% of the company`s shares. Most of the time, the main actors of the company are the founders and promoters of the company. The crucial and vital decisions of the company are made only by them. In such scenarios, it is very important that the minority shareholders of the company have a protective shield that protects their interests. It will require that the shareholders` agreement contain clauses ensuring that money invested by a shareholder in a company is not taken for other purposes. Both the share contribution contract and the shareholder contract are signed at the end of the due diligence process when setting up a company. Although they are two separate documents, they are sometimes brought together in one document, called an investment agreement….