What is a shareholders' agreement?
A shareholders' agreement is a contract between two or more shareholders governing how they will act towards each other and towards the company. It is particularly common in unlisted companies with a small ownership group, where the owners want to regulate more than the Swedish Companies Act and the articles of association do.
What the agreement usually covers
Common provisions include how board seats are allocated, which decisions require a qualified majority, how shares may be transferred (right of first refusal, redemption clauses, drag along and tag along), founder vesting, non-compete and confidentiality clauses, and what is to apply on an exit.
How it differs from the articles of association
The articles of association are registered with the Swedish Companies Registration Office, public, and binding on the company and all its shareholders. A shareholders' agreement is private and binds only the parties to it. As a result, a clause in the agreement generally has no effect under company law: a resolution at the general meeting that conflicts with the agreement is normally still valid, while the party who breached the agreement may be liable in damages to the other owners. Transfer restrictions intended to be effective against the company must therefore also be written into the articles.