What is Shareholders Agreement?
Nexa Consultancy | Startup & Finance Glossary
A Shareholders' Agreement (SHA) is a legal contract among the shareholders of a company (including founders and investors). It governs their rights, responsibilities, and the relationship between them. It is one of the most critical documents for a startup.
Why it Matters for Startups:
An SHA provides a clear rulebook for how the company will be run, preventing future disputes. It covers crucial topics like board composition, investor rights (like pro-rata rights and information rights), restrictions on selling shares (ROFR/Tag-Along), and what happens if a founder leaves. No professional investor will invest in a company without a comprehensive SHA in place. Our Founder Agreement Checklist provides a good starting point.
Example:
A startup's SHA specifies that any decision to sell the company requires the approval of both the founders and the lead investor, ensuring all key parties are aligned on major exit decisions.