Shareholders’ agreement

A shareholders' agreement is a private contract among all or some shareholders of a company governing their mutual rights and obligations beyond what the articles of association provide. It covers governance rights (board rights, veto rights), share transfer conditions (pre-emption, tag-along, drag-along), distribution policy and dispute resolution. Unlike articles, it is confidential and binds only signatories. Its drafting must anticipate exit and conflict scenarios that may arise years later.

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Example: in a Series A round of CHF 5.0 million, the shareholders' agreement between the fund and founders provides: 4-year vesting with 1-year cliff, fund veto rights on decisions above CHF 500,000, mutual pre-emption on any share transfer, tag-along on majority disposal, 1x non-participating liquidation preference and good/bad leaver provisions. This agreement governs the shareholder relationship throughout the investment lifecycle.

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Hectelion advises on the structuring and negotiation of shareholders' agreements in fundraising and M&A mandates.