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A shareholders' agreement is a private agreement between the shareholders of a BV stating how they interact with each other: who has a say, what happens if someone wants to leave, how the dividend is distributed, and what happens if things grind to a halt. It is not legally mandatory. Yet there is one moment when you always suddenly need it badly: precisely the moment when you don't have one.
Four years ago, Bram and Joris started a private limited company (BV) together. Two friends, fifty-fifty, the same idea, the same garage. They signed the articles of association at the notary and carried on. It wasn't until Joris wanted to sell his shares because he was moving to Portugal that they discovered they had never agreed on who he was allowed to sell them to and for what price. Six months of hassle later, a mediator, and €14,000 in legal fees later, everyone was a little wiser. In this guide, we explain what a shareholders' agreement is, what it regulates, and why Bram and Joris should have had one before starting.
The short answer
A shareholders'(sometimes abbreviated as AHO or SHA) is a contract between the shareholders of a company. It supplements the articles of association with agreements regarding mutual relations — agreements that should not or must not be included in the public articles of association. Examples include dividend policy, an obligation to offer shares upon departure, a non-compete clause between shareholders, and what to do if you reach a fundamental legal disagreement.
The law provides a few standard rules for private limited companies in Book 2 of the Dutch Civil Code, but it contains virtually nothing about how you and your co-shareholder interact with each other. You make those agreements yourselves. And if you don't make them? Then you fall back on the open standards of reasonableness and fairness, the articles of association, and — usually — a lawyer.
Why would you have one?
Because it covers the moments that the law and the articles of association remain silent about. A shareholders' agreement is not a luxury legal document; it is your insurance against exactly the kind of disputes you currently think you will never have. Concrete reasons to have one:
- Preventing deadlocks. Especially in 50/50 structures — if you disagree on an important matter, the entire BV comes to a standstill. A shareholders' agreement stipulates how to resolve this.
- Clear exit arrangements. What happens if one of you wants to leave, becomes ill, passes away, or wants to start working elsewhere? Who is allowed to buy, at what price, and within what timeframe?
- Protection of value. A shareholders' agreement stipulates that a departing shareholder does not take customers or knowledge with them. No shareholders' agreement? Then that competitor starts their own business around the corner.
- Dividends and profit distribution. Who receives what, when, and under what conditions — useful to establish in advance before money is involved.
- Board agreements. How do you become a director, how are you dismissed, and which decisions require which majority? The articles of association state the minimum; the shareholders' agreement contains the details.
Shareholders' agreement, articles of association, and the law: who wins?
Three layers, three types of rules.
- The law (Book 2 of the Dutch Civil Code). The statutory minimum for private limited companies. Mandatory on certain points (such as convening a shareholders' meeting), supplementary to others.
- The Articles of Association. Publicly filed with the Chamber of Commerce. Binding under corporate law for everyone dealing with the BV. The basic rules are set out here.
- The shareholders' agreement. A private contract between the shareholders. Binding under the law of obligations for the signatory. This contains the agreements you do not want the whole world to see.
What if they contradict each other? Under corporate law, the articles of association generally take precedence; you cannot amend in a shareholders' agreement what the articles of association mandatorily regulate. However, shareholders can bind each other contractually — for example, to vote in a specific way at the general meeting. We elaborate on this further in shareholders' agreement vs. articles of association.
What is stated in a shareholders' agreement?
The content varies by BV, but you will almost always encounter these components. A good set contains at least:
- Entry and exit — under what conditions may a shareholder sell or transfer their shares?
- Obligation to offer — a departing shareholder must first offer his shares to the other shareholders.
- Pricing — how is the value of shares calculated upon sale?
- Good leaver / bad leaver — the circumstances under which you leave determine the price you receive.
- Tag along / drag along — minority protection and co-sale obligation upon sale of the majority.
- Deadlock arrangement — what to do if you can no longer reach an agreement.
- Non-compete and non-solicitation clauses — before and after shareholding.
- Confidentiality.
- Dividend policy.
- Voting agreements — how to vote on important decisions.
The complete checklist with explanations for each clause can be found in What is included in a shareholders' agreement.
Is a shareholders' agreement mandatory?
No. The law does not prescribe it. A BV works perfectly fine without it. But — and that is the whole point — a BV works perfectly fine without general terms and conditions, without insurance, and without a smoke detector. It depends on what you consider an acceptable risk.
In practice: as soon as you have more than one shareholder, a shareholders' agreement is not an excessive legal refinement but a normal step. Are you starting with two, three, or five? Draw it up immediately. Better an hour of legal work and a few hundred euros now than a €14,000 lawsuit in three years — see Bram and Joris.
When are you making it?
Preferably: before the incorporation of the BV, or in any case before important decisions are made. Three common moments:
- Upon incorporation of the BV. Simultaneously with the articles of association, before things get complicated.
- Upon the entry of a new shareholder— an investor, a key employee with shares, or a joint venture partner—there is always a reason to (re)document the agreements.
- In the event of a significant change. A shift in shareholdings, a merger, or a transition to a holding structure. Also read about collaborating via a joint venture.
What you absolutely must not do: wait until there is trouble. Concluding a shareholders' agreement after the first conflict is like taking out fire insurance while the kitchen is already smoking.
Who do you have draft a shareholders' agreement?
Not by the notary (who handles your deed of incorporation and articles of association, which is something different). Not by your accountant (who handles your figures). But by a legal expert or lawyer with experience in corporate law. A specialized SME legal expert knows the standard clauses as well as the common mistakes and is usually much more affordable than a large law firm.
What must be able to answer your question in any case:
- Who are the shareholders and in what proportion?
- What do you do together, and who does what (management/operations)?
- Do you expect investors, departures, or new partners in the coming years?
- What is the worst-case scenario imaginable for you — that is the best thing to protect yourself against.
View the options for having a shareholders' agreement drafted or reviewed via MKB Juristen, and for the difference between jurists and lawyers, see the difference between a lawyer and a jurist.
Bram and Joris today
Bram and Joris settled things without a judge back then — fortunately. Their new BV, with a successor, has had a decent shareholders' agreement since the start, written in two weeks for a fraction of what their mediator cost at the time. Bram now tells the story to anyone wanting to start a BV with a friend. We continue telling it here.
Or, to be honest: a shareholders' agreement is a document you hope you never need, and precisely for that reason, you should always have. Driving someone into legal expense once just to prove that yourself is enough.
Frequently Asked Questions
A shareholders' agreement is a private agreement between the shareholders of a BV (or other company) in which mutual agreements are recorded. It regulates matters not included in or belonging in the articles of association, such as dividend policy, exit arrangements, deadlock mechanisms, and non-compete clauses between shareholders.
No. The law does not prescribe it. A BV operates without it. However, as soon as there is more than one shareholder, it is strongly recommended in practice—it is much cheaper to make agreements in advance than to litigate afterwards.
The articles of association are public (filed with the Chamber of Commerce) and apply under corporate law to everyone dealing with the BV. A shareholders' agreement is private and applies under contractual law between the shareholders who sign it. In the event of a conflict, the articles of association generally take precedence.
Preferably immediately upon the incorporation of the BV, or in any case before important decisions are made. Other common times include the entry of a new shareholder and significant changes to the structure. Under no circumstances wait until a conflict arises.
Standard components include: entry and exit, offer obligation, price determination, good leaver/bad leaver, tag along and drag along, deadlock clause, non-compete clause, confidentiality, dividend policy, and voting agreements. The exact implementation depends on your BV and your shareholders.
A legal expert or lawyer with experience in corporate law. Notaries rarely do this (they focus on articles of association and deeds); accountants are also better off not doing it. A specialized SME legal expert combines professional expertise with a reasonable rate.
In that case, only the law and the articles of association apply. For many practical situations—departure, conflict, dividends, competition—that is insufficient. You fall back on open standards of reasonableness and fairness, which leads to slow, expensive proceedings in disputes. It is better to draw up a shareholders' agreement beforehand than to go to court afterwards.
