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A Brief Guide to Shareholders’ Agreements

A shareholders’ agreement is a private agreement between shareholders which determines the manner in which shareholders exercise their rights with respect to the shares in the company or the rights attached to the shares in the company.

The law governing companies incorporated in Cyprus is the Companies Law Cap 113 (the “Companies Law”), which covers a vast amount of territory, including how companies must be formed, operated and kept in proper order. Anyone who buys shares in a company will, in the absence of a shareholders’ agreement, purchase them subject to the relevant law. This has the effect of creating a binding, ‘statutory’ contract between the shareholders. This statutory contract is more formally known as the “Articles of Association” which give detailed instructions on how the company will operate. Read more…