A shareholders' agreement can be the key to predictability in how a company is run. It's a binding agreement between the company's shareholders, and it sits as a supplement to the company's articles of association and any other share-related agreements between different parties.
A shareholders' agreement typically deals with general provisions tied to future events. It gives you a pre-defined direction for handling different situations, which is usually more useful than trying to sort them out after the fact. In short, a shareholders' agreement can prevent potential conflicts and reduce legal costs.
Why have a shareholders' agreement?
A well-drafted shareholders' agreement is essentially an insurance policy against conflict. It becomes especially necessary when you need to regulate things between shareholders that go beyond what the Norwegian Companies Act and the articles of association cover. The articles of association mainly regulate the company's legal affairs; the shareholders' agreement focuses on the relationship between shareholders, and only between those who are actually party to the agreement.
Who signs the shareholders' agreement?
A shareholders' agreement is typically entered into by all of the company's shareholders, but it's also possible for a subset of shareholders to form an arrangement among themselves, sometimes including third parties. The agreement is only binding on the parties who actually sign it. The articles of association, by contrast, apply to all shareholders and are publicly accessible through the company register.
When is a shareholders' agreement relevant?
A shareholders' agreement becomes an important governance tool when the cooperation between shareholders is critical. It's particularly valuable in situations with few owners, where what's written into the law doesn't offer enough of a solution. Examples of relevant situations: companies that want to keep ownership internal, the establishment of active owners in the startup phase, potential acquisitions, and transfers of shares where the pricing can be tricky.
What can a shareholders' agreement cover?
There's no template for the optimal shareholders' agreement; every situation is unique. The agreement can cover a range of areas, including the composition of the board, decision-making, and (especially) the transfer of shares. On transfers, the agreement can cover things like rights of first refusal, approval procedures, pricing, restrictions on external buyers, tag-along and drag-along rights, and other relevant restrictions.
A note on templates: shareholders' agreement templates you find online may not fit your situation precisely. Think carefully about what matters to you and the other shareholders in different scenarios. Understand what the agreement actually says, and what the consequences of different outcomes could be. Shareholders' agreements should be tailored to the company's specific needs, and it's worth getting proper advice to make sure the agreement is robust and aligned with current law.