2025 Pub. 7 Issue 1

Shareholder agreements play a key and often crucial role in governing relationships among shareholders of a corporation and can be a very effective means to protect shareholders, including with respect to transfer of shares, voting rights and decision making. Shareholder agreements also provide a way to supplement or vary the default rules set forth in applicable law. Thus, a well-thought-out shareholder agreement can address many issues that may arise in the future, helping to prevent disputes and avoid costly litigation. This article highlights some of these important issues, and while it pertains to shareholder agreements, many of the same considerations are equally applicable to operating agreements of limited liability companies.