Shareholders agreement
What Shareholders agreement means, where you will meet it and what it means for your business.
DefinitionA shareholders agreement (SHA) is the contract between a company's founders, investors and the company that sets out rights on shares, board seats, decision-making, transfers and exit.
The SHA is signed after a term sheet and before money moves. It records each investor's shares and price, the board composition, matters that need investor consent such as new share issues, debt above a limit or a change of business, and protections like anti-dilution, pre-emptive rights on new shares, right of first refusal and tag-along on transfers, drag-along for a sale, and liquidation preference on exit. Founder vesting, non-compete and ESOP pool size usually sit here too. You meet it at your first priced round and at every round after, when it is amended and restated. What it means for you: read the consent matters and the liquidation preference carefully, because they govern how much control you keep and how proceeds are split, and make sure the AOA is amended to mirror it, or the company is not bound.
Where you will meet this term
- CFO ServicesFunded startups and growing companies that need a finance head for a few hours a week: runway, board packs, budgets and fundraise support, without a full-time hire.from ₹24,999/month
- Investor Pitch DeckFounders raising pre-seed to Series A who need a deck investors finish reading, with the numbers behind it ready for the questions that follow.from ₹24,999
- ESOP Planning & StructuringPrivate Limited Companies that want to hire with equity: pool sizing, a scheme the board can approve, the MGT-14 filing and grants that hold up at exit.from ₹39,999