A Shareholders' Agreement is an agreement between the shareholders of a company which defines the rights and obligations of shareholders and also define a roadmap of how the company will operate.
A shareholders’ agreement may consist of the following: -
It will regulate the authorities of stakeholders and helps in protecting the position of minority shareholders. It will clarify all the powers and rights of all. Hence,it also acts as a regulator of the relationship between small and large shareholders.
With the help of shareholders’ agreement, it is easy to make changes. Because you do not have to formally amend the constitution every time a minute change occurs. So, these are best for small and medium companies.