Shareholders' Agreement

Also called SHA

A shareholders' agreement: a contract among a company's shareholders governing their rights and obligations, voting, transfers, board seats, protective provisions, beyond what the company's charter covers.

Why it matters

The SHA is where investor rights and control terms live after a round, so its clauses shape how much freedom founders keep. Reading and negotiating it carefully, not just the valuation, is essential to understanding a deal.

For example

The shareholders' agreement signed at Series A spells out the investors' board seat, veto rights, and what happens to shares if a founder leaves.

Go deeper

Founder Vesting in a Shareholders' Agreement: What Startup Founders Must Know Treelife · article The India-specific piece that tells you where the split actually gets signed. It separates the founders' agreement (equity, roles, IP, vesting between you) from the shareholders' agreement (your terms with investors), and stresses the timing that trips Indian founders up: get vesting in writing before shares are issued, because you cannot bolt it on retroactively once the cap table exists. It also breaks down good-leaver vs bad-leaver treatment, which is the clause that decides what a departing cofounder actually keeps. Open treelife.in →

Related terms

Also in Starting Up

See how founders actually handle this on Co-founders, team and legal, part of the Starting Up hub.

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