Document background
The Startup Shareholder Agreement serves as a foundational document for Pakistani startups, establishing the legal framework for relationships between shareholders and the company. It becomes essential when a startup moves beyond initial formation to include multiple shareholders, particularly during funding rounds or when bringing in new investors. The agreement, governed by Pakistani law, particularly the Companies Act 2017, details share ownership, voting rights, transfer restrictions, and management rights. It provides mechanisms for dispute resolution, exit strategies, and protection of both majority and minority interests. This document is crucial for startups seeking to establish clear governance structures, attract investment, and ensure smooth operations while maintaining compliance with Pakistani regulatory requirements. The agreement typically includes provisions for future funding rounds, share dilution protection, and specific rights for different classes of shareholders.
