shareholder agreement

Legal Definition of shareholder agreement

Noun

1. A contract between the shareholders of the company and the company itself, in which certain things, usually the purview of the board of directors, are detailed. For example, a shareholder might be allowed to manage the company, instead of a board of directors. The shareholder agreement will also, typically, control inflows to the company (purchase of shares), how profits are to be distributed, dispute resolution and what to do if a shareholder dies.

Synonyms

• shareholders' agreement
• stockholders' agreement

Related terms

• shareholder