As a shareholder in a company, it is important to have a shareholders` agreement in place to protect your interests and ensure that your rights are enforced. A shareholders` agreement is a legal document that outlines the rights and obligations of the shareholders, including how the company will be managed and how any disputes will be resolved. If you are considering investing in a company in India, you should make sure to have a comprehensive shareholders` agreement in place.
Here is a checklist of items that should be included in a shareholders` agreement in India:
1. Shareholding structure: The agreement should outline the ownership structure of the company, including the number of shares issued and the percentage of ownership held by each shareholder.
2. Voting rights: The agreement should define the rights of shareholders to vote on major decisions such as changes to the company`s structure, appointment of directors, and approval of mergers or acquisitions.
3. Board of directors: The agreement should specify the number of directors, how they will be appointed, and the extent of their powers.
4. Management and operations: The agreement should establish the roles and responsibilities of each shareholder with regards to the management of the company. It should also lay out the procedures for decision-making and governance.
5. Transfer of shares: The agreement should outline the rules for transferring shares, including the right of first refusal and restrictions on transfers to third parties.
6. Valuation of shares: The agreement should establish the method for valuing shares in the company, which can be important in the event of a buyout or merger.
7. Dispute resolution: The agreement should include a mechanism for resolving disputes between shareholders, such as arbitration or mediation.
8. Termination of agreement: The agreement should outline the circumstances under which the agreement can be terminated, such as a change in the company`s ownership or a breach of the terms of the agreement.
By ensuring that all of these items are covered in your shareholders` agreement, you can protect your investment in the company and avoid potential disputes down the road. Make sure to work with a qualified attorney who is experienced in drafting shareholders` agreements in India to ensure that your agreement is legally binding and enforceable.