Articles of association
The articles of association are drawn up during registration with the Swedish Companies Registration Office and are public. They set the common rules for the board, operations, and e.g. right of first refusal clauses.
Shareholders' agreement
The shareholders' agreement is generally a private contract between owners and the company. It governs how disputes should be resolved, if founders have lock-up periods, and how a future sale should occur (drag-along and tag-along clauses).
Important provisions to know
- Right of first refusal (hembud): If you want to sell a share, existing owners may have the right to buy it back before an outsider.
- Pre-emption rights (förköp): Right for existing shareholders to buy shares before they are offered to a third party.
Summary
Read both documents properly before investing. They provide a clear indication of how the company is expected to be governed.