Write a note on Shareholders Agreements.

Shareholders Agreements Shareholders Agreements (SHA) are very popular in newly formed business. There are numerous situations where such agreements are entered into family companies, venture capital investments etc. Shareholder's agreement is a contractual arrangement between the shareholders of a company describing how the company should be operated and the defining inter-se shareholders rights and obligations. Shareholder's agreements are the result of mutual understanding among the Shareholders of a company to which the company generally becomes a consenting party. Such agreements are specially drafted to provide specific rights, impose definite restrictions over and above those provided by the Companies Act. A SHA creates personal obligation between the members signing such agreement however, such agreements do not become a regulation of the company in the way the provisions of Articles are unless the Articles are amended to incorporate the provisions of the SHA.