Shareholders' agreement – what should the shareholders regulate?
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Short answer: A shareholders' agreement regulates the relationship between the shareholders and is used for matters that are not suitable for the articles of association or need to be described in more detail. The agreement is not submitted to the Swedish Companies Registration Office (Bolagsverket), but should be coordinated with the articles of association, the share register, and any employment or consultancy agreements.
What is a shareholders' agreement?
A shareholders' agreement, also known as a partnership agreement or consortium agreement, is a civil law contract between two or more shareholders. The Swedish Companies Registration Office describes it as a common way to regulate issues that are not suitable or possible to include in the articles of association. It is therefore particularly important in owner-managed companies where the shareholders both work in the business and invest capital.
12 issues that should be regulated
- Ownership and capital. What does the ownership structure look like and how should future capital needs be handled?
- Work effort. Should the shareholders work in the company, at what level, and for what compensation?
- Decision-making rules. Which decisions require a simple majority, a qualified majority, or unanimity?
- Board of directors. Who has the right to appoint directors and how should the board be composed?
- Dividends. Is there a common principle for dividends versus reinvestment?
- Financing. Should capital be provided as loans, shareholder contributions, or a new share issue?
- Transfer of shares. How are sales to third parties handled?
- Pre-emption and right of first refusal. How should existing owners be given the opportunity to purchase?
- Tag-along and drag-along. What applies if a major shareholder wants to sell?
- Competition and solicitation. What restrictions are reasonable after exit?
- Deadlock. How are deadlocked situations between owners resolved?
- Disputes and exit. Which law, court, or arbitration procedure applies?
Shareholders' agreement and articles of association must work together
The articles of association bind the company and have corporate legal effect. The shareholders' agreement primarily binds the parties to the agreement. If the documents say different things, a situation can arise where a decision is valid under corporate law but still constitutes a breach of contract between the owners. Therefore, transfer restrictions, decision-making rules, and share classes should be reviewed together.
What happens when someone wants to leave?
A well-written agreement should describe what happens in the event of a voluntary sale, illness, death, long-term absence, serious breach of contract, or when a shareholder stops working in the company. The valuation model is central. If the agreement only states that shares are to be sold at "market value" without a method, the next conflict could be about exactly what the market value is.
Common mistakes
- using the same template for passive investors and working founders
- forgetting deadlock rules
- not coordinating the agreement with the articles of association
- lacking a clear valuation mechanism for exits
- making non-compete clauses too broad
- allowing new shareholders to enter without an obligation to sign the agreement
See Mallbutiken's template for a shareholders' agreement.
In the event of an actual transfer of shares, our guide on share transfer agreements may also be relevant.
FAQ
Does a shareholders' agreement have to be registered?
No. Shareholders' agreements are not submitted to the Swedish Companies Registration Office.
Can the agreement replace the articles of association?
No. The documents have different functions and should complement each other.
Does a company with two owners need an agreement?
There is no general legal requirement, but two-owner companies can be particularly sensitive to deadlock situations if the owners disagree.
The article provides general information and does not replace legal advice.
