Shareholders’ agreements – what is their purpose

14 February 2023 | Knowledge, News

The articles of association of a limited liability company or a joint-stock company cover corporate governance issues and mutual relations between shareholders. Sometimes, however, these are not detailed enough. As a result, shareholders’ agreements are increasingly being used to cover the above issues in more detail.

Subject matter of shareholders’ agreements

Basically, shareholders’ agreements can deal with any aspect of company operations and relations between shareholders.

The decision-making process at a general meeting is a key issue for both shareholders and the company itself.

Shareholders’ agreements should therefore contain rules on how resolutions are passed. For this reason, it is important to specify:

  • A list of reserved matters on which a resolution of the meeting is required
  • The majority required to pass a resolution on a particular matter – the Code provides for an absolute majority of votes, but unanimity or a qualified majority may be required for certain matters, e.g. an increase in share capital, the granting of a guarantee or suretyship by a company
  • A quorum, i.e. the amount of capital that must be represented (present) at a general meeting in order for the meeting to be held and for resolutions to be passed.

With regard to a limited liability company, there is also the possibility of granting individual power to a shareholder, which amounts to the need to obtain their consent to pass a certain resolution, e.g. with regard to the disposal of real estate owned by the company. However, this does not seem to be permissible in a joint-stock company.

Shareholders’ agreements – what else should be covered

Other important elements that shareholders’ agreements should cover are rules for the conduct of company operations and the appointment of members of company bodies. In this respect, it is very common to grant individual powers to appoint a certain number of members, depending on the shareholding represented by a particular shareholder.

One area that can be a source of conflict between shareholders is the way in which company profits are distributed – it is therefore possible and sensible to address this matter in shareholders’ agreements. It is common practice to provide for at least a minimum percentage of the profits made in a given financial year to be distributed to shareholders, with the remainder being allocated to company investments or a legal reserve.

It is important that shareholders’ agreements contain appropriate:

  • Clauses ensuring that the rights and interests of minority shareholders are respected in a manner also taking into account the shareholding they represent
  • Share disposal rules
  • Dispute resolution procedures in case of a deadlock between shareholders.


In recent years, shareholders’ agreements have become an increasingly common and positive phenomenon in commercial transactions. However, these do not always define the rights and obligations of the parties in sufficient detail, which can lead to a deadlock or disputes, with negative consequences for company operations.

It is therefore necessary to clearly and precisely set out the rights and obligations of shareholders and to include appropriate provisions on key issues.

Any questions? Contact:

Rafał Rapala

Dominik Karkoszka

Source: Rzeczpospolita

Date: 12.01.2023


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Contact us:

Rafał Rapala

Rafał Rapala

Attorney at Law, Partner, Head of Corporate Practice, Shareholders Conflicts

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Dominik Karkoszka

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