Before jumping directly into the definition of the Shareholders Agreement, let's look into the basic concept of Shareholders and Agreement in a separate way.

SHAREHOLDER:

• A shareholder is a person or an institution that legally holds one or more share of the share capital of the public or private corporation.
• Legally, a person is not a shareholder until their name and their details are entered in the corporation's register of Shareholder or members.
• Shareholders are legally separate from the corporate itself.
• Shareholders are not liable for the debts of the company.

AGREEMENT:

• The agreement can be defined as every promise and every set of promises forming the consideration for each other.
• A promise is a result of an offer (proposal) by one person and its acceptance by the other
• This promise from the two parties to one another is known as agreement.

The shareholder's agreement is also known as stockholder's agreement. It is an agreement that provides the shareholders, efficient information and also information on the management of the company.

It is made with an intention to treat the shareholder fairly and their rights are protected. The agreement includes the outlining of the fair and legitimate pricing of the share. A shareholders agreement is different from the Company's bylaws. Company's bylaws are mandatory and portray the outline of the company's operations. Here, a Shareholders Agreement is considered optional.

  Shareholders Agreement differs and varies enormously from different countries and in different fields. But there are certain principles that are common in all the agreements:

• regulating the ownership and voting rights of the shares in the company
• Control and management of the company
• making provision for the resolution of any future disputes between shareholder
• protecting the competitive interests of the company
• protecting the selling rights of the shareholding.

Before going to the types of the Shareholders Agreement, let's talk about the types of shareholders:

• Equity Shareholders
• Preference Shareholders

There are two types of Shareholders namely,

• General Shareholders Agreement
• Unanimous Shareholders Agreement.

ADVANTAGES OF SHAREHOLDERS AGREEMENT:

-In case of any dispute between the shareholder and the management of the company, then Shareholders agreement is to be consulted and looked.

-By sticking to the agreement, one can bound the company to do and act upon the terms agreed and decided. and many more

DISADVANTAGES  OF THE SHAREHOLDERS AGREEMENT:

-Sometimes during the dispute, the Association of Article is considered and the shareholder's agreement is not considered and not regarded.

-The major disadvantage from the perspective of the directors of the company is by voting more than 50% in favour of the shareholder can remove any director of the company from its position.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.