There are many things to consider when preparing a shareholders agreement. Most importantly, it's imperative that it is customised to your business and theobjectives of its shareholders. Matters that are customarily addressed in a shareholders agreement include:

1. Pre-emptiverights:That is, the ability for existing shareholders to have priority over any third party in relation to fundraising activities and any proposed sale of shares.
2. Voting thresholds and reserved matters:Namely, what level of approval is required by the board and/or shareholders for matters voted on and what matters (above that prescribed by law) are reserved for shareholder approval.
3. Composition of the board and nominee representatives.
4. Future fundraisingactivities.
5. Transfer or shares -processand procedure.
6. Dividend policies.
7. Preparation of accounts.
8. Drag and Tag alongrights - the ability to force a minority shareholder to sell and/or the ability for a minority shareholder to participate inthe sale of shares by a majority shareholder(s)
9. Matters which may trigger a compulsory exit by a shareholder (for example, shareholder default or death or disability of a key associated individual)and how such interest is valued
10. Restrictive covenants - do you seek torestrict a shareholder from having an interest in a competing business?
11. The establishment of business plans and budgets.

My advice would be to seek legal assistance in the drafting of this agreementand not rely on template documents.

Kind regards

Richard Partridge

Gadens