Stockholders’ agreements exist to establish and describe the respective rights of the stockholders or shareholders of a business. These agreements may be referred to alternatively as shareholder agreements. A stockholder agreement generally sets out the shareholders’ rights, privileges and obligations regarding the business as well as set forth restrictions regarding the transfer of shares. Having a stockholder agreement minimizes any potential future issues by clarifying how certain matters are resolved and by providing a forum for dispute resolution.

1. Decision-making. The stockholder agreement can outline what voting share percentage is required for certain decisions. For example, significant decisions pertaining to the business may require a unanimous decision by all of the stockholders, while other less important decisions may simply require a majority vote. 
2. Transfer and Ownership of Shares. Stockholder agreements can place restrictions on who can become a stockholder by requiring approval of the board with respect to all transfers of shares.
3. Exit Strategy. A stockholder agreement will provide for different exit strategies in the event that one or more shareholders no longer desire to participate in the business.