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Company Shareholders Agreement

R1 499

Create a detailed shareholders agreement that regulates ownership, voting rights, director appointments, share transfers, funding, dividends, confidentiality, restraints, dispute resolution, and exit arrangements between shareholders.

A Company Shareholders Agreement is a private agreement between shareholders, and often the company, that regulates their commercial relationship and how the company will be controlled, funded, managed, and exited. It is commonly used for private companies with two or more shareholders, family businesses, start-ups, joint ventures, investment companies, and owner-managed businesses. The agreement should deal with issues that are often not fully covered in the company’s Memorandum of Incorporation, such as reserved matters, share transfers, funding obligations, dividend policy, director appointments, confidentiality, restraints, valuation, deadlock, and dispute resolution.

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South African legal context (2026 checklist)

A shareholders agreement must be consistent with the Companies Act and the company’s Memorandum of Incorporation. If a provision conflicts with the Act or the MOI, it may be void to the extent of the inconsistency. The MOI remains the company’s constitutional document, while the shareholders agreement is a private contract between the parties. Before signing, shareholders should check whether the MOI must be amended so that voting thresholds, transfer restrictions, share rights, director appointments, and reserved matters work properly together.

  • Companies Act 71 of 2008
  • Section 15: Memorandum of Incorporation, rules and shareholders agreements
  • Section 16: Amending the Memorandum of Incorporation
  • Section 24: Company records
  • Section 26: Access to company records
  • Section 37: Preferences, rights, limitations and other share terms
  • Section 38: Issuing shares
  • Section 39: Pre-emptive rights to be offered and to subscribe for shares
  • Section 40: Consideration for shares
  • Section 45: Loans or other financial assistance to directors and related or inter-related companies
  • Section 46: Distributions must be authorised and satisfy the solvency and liquidity test
  • Section 48: Company or subsidiary acquiring company shares
  • Section 61: Shareholders meetings
  • Section 65: Shareholder resolutions
  • Section 66: Board, directors and prescribed officers
  • Section 71: Removal of directors
  • Section 75: Directors’ personal financial interests
  • Section 76: Standards of directors’ conduct
  • Section 77: Liability of directors and prescribed officers
  • Section 112: Proposals to dispose of all or the greater part of company assets or undertaking
  • Companies Amendment Act 16 of 2024
  • Companies Second Amendment Act 17 of 2024
  • Companies Regulations, 2011, including beneficial ownership and securities register requirements where applicable
  • Protection of Personal Information Act 4 of 2013, where personal information of shareholders, directors, beneficial owners, or investors is processed

Use this as a starting point only. Verify current gazetted amendments, tribunal rules, and SARS / DOL circulars that may apply to your matter.

Typical questions we'll walk you through

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What is the full registered name of the company?
What is the full registered name of the company?
What is the company registration number?
What is the company registration number?
What type of company is it: private company, personal liability company, or public company?
What type of company is it: private company, personal liability company, or public company?
Who are the shareholders and what percentage of shares does each shareholder hold?
Who are the shareholders and what percentage of shares does each shareholder hold?
Are there different classes of shares?
Are there different classes of shares?
What voting rights attach to each shareholder or share class?
What voting rights attach to each shareholder or share class?
Must certain decisions require unanimous approval, special majority approval, or ordinary majority approval?
Must certain decisions require unanimous approval, special majority approval, or ordinary majority approval?
Who may appoint directors to the board?
Who may appoint directors to the board?
How many directors will the company have?
How many directors will the company have?
Will any shareholder have a right to appoint or remove a director?
Will any shareholder have a right to appoint or remove a director?
What matters must be reserved for shareholder approval?
What matters must be reserved for shareholder approval?
How will dividends be declared and distributed?
How will dividends be declared and distributed?
Will shareholders be required to make loans, capital contributions, guarantees, or provide funding?
Will shareholders be required to make loans, capital contributions, guarantees, or provide funding?
What happens if a shareholder refuses or fails to contribute funding?
What happens if a shareholder refuses or fails to contribute funding?
Are shareholders allowed to sell or transfer their shares?
Are shareholders allowed to sell or transfer their shares?
Must shares first be offered to existing shareholders before being sold to outsiders?
Must shares first be offered to existing shareholders before being sold to outsiders?
Will there be tag-along rights for minority shareholders?
Will there be tag-along rights for minority shareholders?
Will there be drag-along rights for majority shareholders?
Will there be drag-along rights for majority shareholders?
What happens if a shareholder dies, becomes insolvent, resigns, is dismissed, or becomes disabled?
What happens if a shareholder dies, becomes insolvent, resigns, is dismissed, or becomes disabled?
How will shares be valued if a shareholder exits?
How will shares be valued if a shareholder exits?
Will the agreement include restraint of trade, non-solicitation, or confidentiality obligations?
Will the agreement include restraint of trade, non-solicitation, or confidentiality obligations?
How will deadlocks between shareholders be resolved?
How will deadlocks between shareholders be resolved?
Will disputes be resolved by negotiation, mediation, arbitration, or court proceedings?
Will disputes be resolved by negotiation, mediation, arbitration, or court proceedings?
Does the company have an existing Memorandum of Incorporation that must be aligned with the agreement?
Does the company have an existing Memorandum of Incorporation that must be aligned with the agreement?
Who will sign the agreement on behalf of the company and each shareholder?
Who will sign the agreement on behalf of the company and each shareholder?

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