The shareholders’ agreement is one of the most important and, at the same time, most frequently underestimated instruments of corporate governance in start-ups and SMEs. The agreement enables shareholders to individually structure their cooperation outside the articles of association and to defuse typical conflict situations at an early stage.
At the Lunch & Law event at Technopark Winterthur, Christoph D. Studer and Oliver Fritschi demonstrated how a shareholders’ agreement can be used to ‘personalise’ a public limited company and which content is particularly relevant in practice.
What does a shareholders’ agreement regulate?
Typical contents of a shareholder agreement include:
- Voting rights and co-determination rights
- Provisions on profit distribution and financing
- Pre-emptive and co-sale rights
- Non-competition clauses and duties of loyalty
- Modalities for avoiding deadlock situations (e.g. shoot-out clauses)
Especially in the case of shareholders with equal shares (e.g. 50/50), the absence of a conflict resolution clause can threaten the existence of the company. In such cases, the law itself offers only limited and often lengthy solutions, such as dissolution proceedings.
Role of the shareholders’ agreement in start-ups
The shareholder agreement is particularly important in the early stages of start-ups. It should be concluded at the time of formation, as fundamental agreements are more difficult to implement later on. With each round of financing, the ABV evolves and is supplemented by rights typical for investors, such as:
- Liquidation preferences
- Dilution protection clauses
- Voting rights on the board of directors
- Vesting arrangements for founder shares
These arrangements shift risks, secure investments and create incentives for long-term commitment.
Company succession: the shareholders’ agreement as a key tool
The shareholders’ agreement also plays a central role in family businesses. It helps to distinguish between management and financial heirs, to control the composition of the board of directors and to establish a binding dividend policy. This makes the generational change more structured, controllable and less conflictual.
Conclusion
A well-structured shareholders’ agreement is not a luxury, but an indispensable management tool. It creates clarity, prevents blockages and increases legal certainty for all parties involved – from the founding of the company through growth phases to succession.
The presentation for the event can be viewed here.
