A shareholders agreement is a legal document that sets out the rights and obligations of the shareholders of a company.
If your business has multiple shareholders or directors, a shareholder agreement can ensure that all parties are on the same page when it comes to how the business will be run and how key business decisions will be made. This will be important in managing expectations and mitigating any future confusion and disputes.
The earlier you have a shareholders agreement in place, the easier it will be to implement. The problem with creating a shareholders agreement later on in your businesses life cycle is that your bargaining position may be compromised over time and that a dispute may arise before you have an agreement in place, which could mean that you are not adequately protected.