Two friends start a business together. Things go well — then they disagree about strategy. One wants to sell. The other doesn't. One stops showing up. The company's constitution says nothing useful about any of this. Without a shareholders agreement, they're heading for court. This scenario plays out in Ghanaian businesses constantly. Here's why a shareholders agreement is non-negotiable for any company with more than one owner.
What Is a Shareholders Agreement?
A shareholders agreement (SHA) is a contract between all shareholders of a company — and sometimes the company itself — that governs their relationship. Unlike the company's constitution (regulations), which is a public document filed at RGD and applies to all shareholders generally, a SHA is private and can be tailored precisely to the shareholders' specific situation.
What the Companies Act Doesn't Cover
Act 992 sets out basic shareholder rights and company procedures — but it doesn't:
- Prevent a shareholder from selling to a competitor
- Guarantee any shareholder a seat on the board
- Specify what happens if a shareholder dies or gets divorced
- Require a minimum dividend to be paid
- Provide a mechanism for resolving 50/50 deadlocks
- Prevent a shareholder from starting a competing business
A SHA fills all of these gaps.
Key Clauses Every Shareholders Agreement Must Have
1. Share Transfer Restrictions
- Right of first refusal: Before selling shares to a third party, the selling shareholder must first offer them to the existing shareholders at the same price
- Drag-along: If majority shareholders want to sell the whole company, they can force minority shareholders to sell too
- Tag-along: If a majority sells their stake, minority shareholders can join the sale on the same terms
2. Board Representation
Specify how many directors each shareholder or shareholder group can appoint. A 25% shareholder may have the right to appoint 1 of 4 directors. Without this, the majority controls the board entirely.
3. Reserved Matters (Matters Requiring Unanimity)
Decisions too important to be decided by simple majority. Examples:
- Issuing new shares
- Selling the company or major assets
- Taking on debt above a threshold
- Changing the business's core activity
- Approving annual budget
4. Deadlock Resolution
What happens when 50/50 shareholders cannot agree on a reserved matter? Options: independent mediator, buy-out mechanism (either party can buy the other out at fair value), or Russian roulette clause.
5. Dividend Policy
Will dividends be paid regularly? What percentage of profits? Or will all profit be reinvested? Without agreed policy, majority shareholders can starve minority of returns while paying themselves large salaries.
6. Non-Compete Clauses
Shareholders agree not to start competing businesses during their shareholding and for a period after. Particularly important for companies where shareholders bring unique knowledge or client relationships.
7. What Happens on Death, Incapacity, or Divorce
Do shares automatically transfer? Does the company have a right to buy them back? Is the deceased's spouse entitled to become a shareholder?
8. Exit Mechanisms
How can a shareholder exit if they want to leave — and at what price? A pre-agreed valuation formula prevents expensive disputes about what the shares are worth.
Use our free Business Structure Finder to choose the right structure. Read about directors' duties and minority shareholder rights.
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