A checklist for a shareholder's agreement in India consists of essential rights and regulations aimed at safeguarding the interests of shareholders. The checklist includes:

• Right to Vote: Shareholders possess the right to participate in voting processes concerning important matters.
• Appointment of Directors and Auditors: Shareholders have the authority to appoint directors and auditors for the company.
• Request for General Meetings: Shareholders are entitled to request general meetings to discuss company affairs.
• Inspection of Company Books and Registers: Shareholders have the right to examine the company's books and registers.
• Access to Financial Statements: Shareholders can access financial statements to ensure transparency and accountability.
• Regulations for Transfer and Sale of Shares: Clearly defined regulations are in place for the transfer and sale of shares, requiring mutual consent from all involved parties.
• Financial Requirements: The shareholder's agreement outlines the financial requirements of the company.
• Procedures for Funding: The agreement specifies procedures for obtaining funding when deemed beneficial for the company's operations.
• Quorum requirements:
• A minimum number of members necessary for a meeting to be considered valid are specified.
• Valuation of shares:
• The agreement outlines methods for determining the value of the company's shares, taking into account market fluctuations.
• Daily company operations:
• Guidelines are provided for the smooth functioning of the company on a day-to-day basis.
• Policies and procedures are established to facilitate efficient operations.
• Shareholder liabilities:
• The agreement clarifies that shareholders have limited liability.
• Shareholders are not directly responsible for the company's activities.

Protection of minority shareholders

The Companies Act, 2013 incorporates provisions that safeguard the rights of minority shareholders within a company. These rights are defined in the shareholder's agreement, which acts as a protective measure against instances such as mismanagement, oppression, and the sale of shares, by majority shareholders without considering minority shareholders' interests. The primary objective of the agreement is to provide assurance and protection to minority shareholders, ensuring that their voice and interests are duly recognized and valued within the company.

Process of Drafting a Shareholders Agreement

Contact and Initial Request
Your request to file for a shareholders' agreement will be promptly acknowledged upon contact. Our dedicated representative will reach out to you to initiate the process further.

Request for Additional Information
If any additional information is required from your end, we will make sure to contact you promptly and seek the necessary details.

Creation and Delivery of Draft Agreement
Upon receiving all the pertinent details, our experienced in-house lawyers and legal experts will diligently draft the shareholders' agreement. You can expect to receive the initial draft within 5-6 business days.
Note: The original price encompasses two rounds of iterations. Should you require any amendments or modifications to the shareholder's agreement format, our proficient lawyers will make the necessary adjustments and resubmit the revised version for your final approval.

Advantages of a Shareholder's Agreement in India:

A shareholder's agreement in India offers several advantages:

1.      It provides protection for smaller shareholders by clearly defining their role and safeguarding their rights within the company.

2.      Both majority and minority shareholders have the opportunity to purchase shares from other shareholders.

3.      The agreement allows shareholders to establish a legal association with the company and grants them the authority to set or modify rules and guidelines.

4.      It ensures the protection of positions and roles of shareholders, incorporating possible restrictions on certain matters that require shareholder decision-making.

5.      Unlike publicly available articles of association, the shareholder's agreement remains confidential, ensuring privacy.

Clarifies Authority and Status:

A shareholder's agreement in India serves to clearly define the authority and status of a shareholder, as well as outline the rights and responsibilities of the issuer of the shares.

Guidance for Shareholder Interaction:

It provides a useful guide for the interaction between small and large shareholders, enabling a harmonious relationship within the company.

Ease of Making Amendments:

The agreement offers a streamlined process for making amendments to the company constitution. This is particularly advantageous for small and medium businesses that may require minor changes without the need for a complete overhaul of the entire constitution.