What is a Shareholders' Agreement

A Shareholders’ Agreement is a written agreement between shareholders and/or partners of a business. This legal document outlines the funding, structure, management and direction of the business.

The purpose of this document is to regulate and govern the relationship between shareholders and management of a company – primarily to protect both parties.

Some companies who raise capital via equity crowdfunding will have both a Shareholders’ Agreement and a Constitution and some may just have a Constitution and include information that may otherwise be found in a Shareholders’ Agreement.

Be sure to review these documents before investing in an equity crowdfunding offer so you are aware of your rights as a shareholder.

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