A Shareholder Agreement (SHA), or Partners' Agreement in the case of an LLC, is one of the most critical legal instruments in corporate governance, complementing the company's charter and regulating relationships between partners. Unlike the charter, which is a public document accessible to any interested person via the Public Registry, a Shareholder Agreement is confidential. It allows business partners to detail the rules of the game, decision-making mechanisms, profit distribution principles, and conflict resolution paths without making this information public. The new "Law on Entrepreneurs" of Georgia places special emphasis on the partners' agreement, giving it priority in internal relations. A professionally drafted agreement guarantees business stability, protecting the interests of both majority and minority shareholders and avoiding destructive corporate disputes.
What Does Shareholder Agreement Service Cover?
Corporate lawyers on the Legal.ge platform offer comprehensive preparation of Shareholder Agreements tailored to your business specifics. The service includes:
- Governance and Voting Rules: Allocation of rights to appoint directors, veto rights on strategic decisions, and special quorum requirements.
- Share Transfer Restrictions: Right of First Refusal, protecting partners from unwanted third parties entering the company.
- Tag-along and Drag-along Rights: Mechanisms protecting minorities when shares are sold (Tag-along) and allowing majorities to sell the entire company by forcing minorities to join (Drag-along).
- Dividend Policy: Defining mandatory minimums for profit distribution and reinvestment conditions.
- Deadlock Resolution: Mechanisms for resolving situations where partners cannot agree (e.g., "Russian Roulette" or "Texas Shootout" methods).
- Funding Obligations: Partners' obligation to contribute additional capital if needed and sanctions for breaching this obligation.