Shareholders Agreement

This Shareholders' Agreement ("Agreement") is made and entered into on this ___ day of ___________, 20__ by and among:

1. [Name of Company], a company incorporated under the Companies Act, 2013, having its registered office at [Registered Address], hereinafter referred to as the “Company”,

2. [Name of Shareholder 1], residing at [Address], holding ___ equity shares of the Company, hereinafter referred to as the “Shareholder 1”,

3. [Name of Shareholder 2], residing at [Address], holding ___ equity shares of the Company, hereinafter referred to as the “Shareholder 2”,

(Additional shareholders, if any)
(The Company and the Shareholders are hereinafter collectively referred to as the “Parties” and individually as a “Party”).

1. Purpose

This Agreement sets out the terms and conditions agreed among the Shareholders for the ownership and management of the Company.

2. Capital Structure

The authorized share capital of the Company is ₹________ divided into ________ equity shares of ₹________ each. The issued, subscribed, and paid-up share capital is ₹________ divided as follows:

3. Share Transfer Restrictions

• No shareholder shall transfer any shares without first offering them to the other shareholders (Right of First Refusal).
• Any proposed transfer shall be subject to prior written consent of all other shareholders.
• In case of death/incapacity of a shareholder, the shares shall be offered to the existing shareholders or their nominees.

4. Board of Directors

• The Board shall comprise ___ Directors.
• Each shareholder holding at least ___% of the shareholding shall be entitled to nominate one Director.
• All major decisions shall require unanimous/majority board consent (e.g., mergers, borrowings, capital expenditure beyond limits).

5. Management of the Company

The day-to-day operations shall be managed by the Managing Director/CEO appointed by the Board. Financial commitments exceeding ₹_______ shall require board approval.

6. Dividend Policy

The Company shall distribute at least ___% of the distributable profits as dividends annually, subject to applicable law and performance.

7. Exit Options

• In the event of a deadlock, shareholders may opt for Buy-Sell, Drag-Along, or Tag-Along provisions.
• Any shareholder intending to sell shares to a third party must first offer them to other shareholders (Right of First Offer).

8. Non-Compete & Confidentiality

• No shareholder shall engage in competing business for ___ years post-exit.
• Each shareholder shall maintain strict confidentiality of business operations.

9. Dispute Resolution

Disputes shall be resolved through arbitration under the Arbitration and Conciliation Act, 1996. Venue: [City]. Language: English.

10. Governing Law

This Agreement shall be governed by the laws of India. Courts of [City] shall have exclusive jurisdiction.

11. Amendment

Any amendment shall be in writing and signed by all Parties.

12. Miscellaneous

• This Agreement constitutes the entire understanding between the Parties.
• If any provision is held invalid, the remaining provisions shall remain effective.

In Witness Whereof

The parties have executed this Agreement as of the day and year first written above.

For the Company:
(Signature)
Name: __________
Designation: __________

Shareholder 1:
(Signature)
Name: __________

Shareholder 2:
(Signature)
Name: __________

Witnesses:
1. Signature: __________ Name: __________
2. Signature: __________ Name: __________