Private Company Shareholder Agreement Template for United States

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Key Requirements PROMPT example:

Private Company Shareholder Agreement

"I need a Private Company Shareholder Agreement for my tech startup with four founding shareholders, including specific provisions for future investment rounds and strong anti-dilution protections to be implemented by March 2025."

Document background
A Private Company Shareholder Agreement is essential when establishing or formalizing relationships between shareholders in a private company. This document is particularly important in the United States where it must align with federal securities laws and state-specific corporate regulations. It should be implemented when a company has multiple shareholders, is seeking investment, or wants to establish clear governance structures. The agreement typically covers share transfers, voting rights, management decisions, dispute resolution, and exit strategies, providing a framework for stable company operations and protecting shareholder interests.
Suggested Sections

1. Parties: Identifies all shareholders and the company, including full legal names and addresses

2. Background: States the context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Share Capital and Shareholdings: Details the company's share structure and current ownership

5. Transfer of Shares: Rules and restrictions regarding the transfer of shares

6. Management and Decision Making: Governance structure and voting rights

7. Shareholder Meetings: Procedures for conducting shareholder meetings

8. Dispute Resolution: Mechanisms for resolving conflicts between shareholders

Optional Sections

1. Tag-Along Rights: Minority shareholder protection allowing them to join in sale of majority shares

2. Drag-Along Rights: Majority shareholders can force minorities to join in sale

3. Non-Compete Provisions: Restrictions on shareholders competing with the company

4. Dividend Policy: Rules for distribution of profits

Suggested Schedules

1. Schedule A - Current Shareholdings: Detailed breakdown of current share ownership

2. Schedule B - Share Valuation Methods: Agreed methods for valuing shares for transfers or exits

3. Schedule C - Reserved Matters: List of decisions requiring special majority or unanimous consent

4. Schedule D - Company Information: Key company details including registration number, registered office

5. Schedule E - Deed of Adherence: Template for new shareholders to agree to the terms

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

Securities Act of 1933: Federal law governing the initial offering and sale of securities, requiring registration and disclosure unless an exemption applies

Securities Exchange Act of 1934: Federal law regulating secondary market trading of securities and establishing the SEC

Internal Revenue Code: Federal tax legislation affecting shareholder distributions, stock transfers, and corporate structure decisions

Uniform Commercial Code: Standardized state laws governing commercial transactions, including the transfer of securities

State Corporation Laws: State-specific laws governing corporate formation, operation, and shareholder rights

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities within each state

State LLC Acts: State laws governing the formation and operation of Limited Liability Companies

Sarbanes-Oxley Act: Federal law establishing enhanced corporate governance and financial disclosure requirements

Delaware General Corporation Law: Comprehensive corporate law framework often used as a model, particularly relevant if incorporated in Delaware

Investment Company Act of 1940: Federal law regulating investment companies and their activities

Antitrust Laws: Federal and state laws preventing monopolistic practices and protecting market competition

Share Transfer Restrictions: Legal provisions limiting or controlling how shares can be transferred between parties

Minority Shareholder Rights: Legal protections ensuring fair treatment of shareholders with non-controlling interests

Buy-Sell Provisions: Legal framework governing the purchase and sale of shares between shareholders

Preemptive Rights: Shareholders' right to maintain their proportional ownership by participating in new share issuances

Tag-Along and Drag-Along Rights: Provisions protecting minority shareholders in sale scenarios and enabling majority shareholders to force participation in sales

Dividend Policy Regulations: Legal framework governing how and when companies can distribute profits to shareholders

Corporate Governance Requirements: Legal standards for company management, board operations, and shareholder meetings

Dispute Resolution Framework: Legal mechanisms for resolving conflicts between shareholders and corporate entities

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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