Shareholders Agreement (SHA)

A Founders Agreement is signed at the start between co-founders, before external investment. A Shareholders Agreement involves all shareholders — founders and investors — and governs the company after a funding round.

A reserved matter is a decision that requires investor approval beyond the normal board or shareholder majority. Common reserved matters include issuing new shares, taking on significant debt, and changing the business.

Anti-dilution protects an investor's percentage ownership if the company raises money at a lower valuation (a down round). Broad-based weighted average is the most common and balanced form. Full ratchet is very punitive for founders.

A drag-along right allows a majority shareholder to force minority shareholders to agree to a sale of the company on the same terms. It prevents a minority from blocking an exit.

In practice, the SHA often contains obligations that supplement the Articles. For consistency and enforcement, key SHA protections should be mirrored in the Articles. We flag any misalignment.

Yes — unlike statutory filings, the SHA is a private contract. It is not filed with the Registrar of Companies and is only shared with the parties.