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Instructions
1. In Microsoft Word, select ‘Final: Show Markup’ under the Review tab to see the comments explaining
particular clauses in this contract template.
2. You should alter the terms of the contract to address your specific business needs.
3. Multiple copies of this Shareholder Agreement should be prepared and signed so that each Shareholder
possesses an individual original copy.
4. This document is designed to be a paper form to be signed by hand – users should fill in the
_______________ spaces with the appropriate details prior to printing this document.
5. For more information on Shareholder Agreements, visit this link to access a handy guide provided by
SingaporeLegalAdvice.com.

Page 1 of 11
 SHAREHOLDER AGREEMENT

THIS AGREEMENT IS MADE ON (the “Agreement”)

(Date)

BETWEEN

(1) ;
(Name and NRIC/FIN or UEN of the Shareholder)

(2) ; and
(Name and NRIC/FIN or UEN of the Shareholder)

(3) .
(Name and NRIC/FIN or UEN of the Shareholder)

(Collectively known as the “Shareholders” and individually, the “Shareholder”.)

original copies of this Agreement have been executed.

WHEREAS

(a) The Shareholders agree to incorporate a private company limited by shares in Singapore (the “Company”) to
develop or continue developing _______________ which will be owned by the Company upon incorporation. Commented [B1]: Business concept or technology.

(b) The Shareholders have agreed to enter into this Agreement to give effect to their intentions, to regulate their
relations inter se, and to regulate the conduct of the business and affairs of the Company.

IT IS HEREBY AGREED AS FOLLOWS:

1. INTERPRETATION Commented [B2]: Define specialised or esoteric terms used in

the rest of the agreement in this clause.

1.1. In this Agreement, the following words shall have the corresponding meanings:

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 “Agreement” refers to this agreement and no other verbal or written
communications

“Memorandum and Articles of Association” refers to the Company’s memorandum and articles of
association lodged in accordance with the Companies Act
(Cap 50) of Singapore.

“Ordinary Shares” refers to the shares of the Company not carrying the
preferential rights stipulated in clause 4.3 of this
Agreement.

“Preference Shares” refers to the shares of the Company carrying the

preferential rights stipulated in clause 4.3 of this
Agreement.

“Shares” refers to the shares of the Company owned by the

respective Shareholders.

2. BUSINESS OF THE COMPANY

2.1. Unless and until all Shareholders agree otherwise, the business of the Company shall be restricted to:

2.1.1. _______________________________________________________; and
2.1.2. _______________________________________________________.
Commented [B3]: This sub-clause restricts and defines the
business of the company. Shareholders not having day-to-day
control of the company may not want the business altered radically
from its original conception to protect themselves from unforeseen
risks.

2.2. Every Shareholder undertakes to promote and develop the business of the Company to the best of his
abilities.

3. SHAREHOLDING OF THE COMPANY

3.1. _______________ shall subscribe unconditionally in cash for _______________ Ordinary Shares of Commented [B4]: Name of shareholder.

S$_______________ each. Commented [B5]: Quantity of shares subscribed by the named

shareholder.
Commented [B6]: Ordinary shares are the most common class
of shares in companies. They carry voting rights and entitle the
3.2. _______________ shall subscribe unconditionally in cash for _______________ Ordinary Shares of shareholders to variable rates of dividends.
S$_______________ each. Commented [B7]: Price of the share.

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 3.3. _______________ shall subscribe unconditionally in cash for _______________ Preference Shares of
S$_______________ each.
4. SHARE CAPITAL AND RIGHTS
4.1. The share capital of the Company is _______________, comprised of _______________ Ordinary
Shares and _______________ Preference Shares.
4.2. Each Ordinary Share and Preference Share shall carry one vote at a Shareholders’ meeting.
4.3. Each Preference Share shall carry one vote at a Shareholders’ meeting and also the preferential right
to _______________.
5. RESTRICTION ON TRANSFER OF SHARES
5.1. No Shareholder can sell, transfer, assign, pledge, charge, or otherwise dispose of any share or any
interest in any share in the Company without the prior written consent of all the other Shareholders.
6. COMPULSORY PURCHASE OF SHARES
6.1. In this clause, the terms “Triggering Events” and “Triggering Shareholder” shall refer to the following
events and persons:
6.1.1. The commencement by a Triggering Shareholder of any proceeding under any applicable
bankruptcy law or the consent of such Triggering Shareholder to the commencement of any such
bankruptcy proceeding against him; or
6.1.2. The entry against a Triggering Shareholder of a decree or order of a court having jurisdiction over
him adjudicating him a bankrupt, if such decree or order shall have continued undischarged or
unstayed for a period of 60 days or such Triggering Shareholder shall not have applied for such
discharge or stay within such 60-day period; or
6.1.3. The death or winding up of a Triggering Shareholder; or
6.1.4. The breach of any of the obligations under this Agreement by a Triggering Shareholder and a
subsequent failure to remedy such breach (if capable of remedy) within 30 days after being given
notice by the remaining Shareholders to do so.
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Commented [B8]: Preference shares are shares that have
preferential rights over ordinary shares, usually in respect of
dividend distributions. A company may not issue preference shares
or convert any issued shares into preference shares unless the
relevant rights pertaining to those preference shares have been set
out in the company’s memorandum or articles of association. This
requirement is found in section 75 of the Companies Act.
Commented [B9]: Share capital of
a company refers to the amount invested in the company. Share
capital is relevant for ACRA business filing, for the purposes of
calculating issued and paid-up share capital.
Commented [B10]: Value of the share capital – e.g. $100. It is
common for small companies to be thinly capitalised.
Commented [B11]: Quantity of shares.
Commented [B12]: The specific rights and benefits carried by
preference shares are commercial decisions decided by each
company. They can be used as a reward for founding shareholders
who have made more contributions to the company. Redeemable
preference shares can also be issued if the articles of association
permits, giving holders a right to repayment of their capital either
at a fixed date or at the option of the company. See section 70 of
the Companies Act.
Commented [B13]: Private companies in Singapore must
restrict the right to transfer its shares. This requirement is found in
section 18 of the Companies Act.
 6.2. When a Triggering Event occurs, the remaining Shareholders may require the Triggering Shareholder
to sell the legal and beneficial ownership of his shares to the remaining Shareholders in proportion to
their respective shareholdings in the Company, or in a proportion agreed upon by the remaining
Shareholders. The purchasers of the shares shall pay a reasonable price for the shares within 21 days
of the determination of the share price, and the Triggering Shareholder shall be bound, upon payment
thereof, to transfer the shares to the purchasers of the shares. The reasonable price for the shares
shall be calculated with reference to the financial position and the balance sheet of the Company, and
in particular, the net book value of the Company. The net book value of the Company shall refer to the
dollar book value of the assets of the Company subtracted by the dollar book value of the liabilities of
the Company, determined in accordance with the Financial Reporting Standards (FRSs) of Singapore.

7. BOARD OF DIRECTORS

7.1. The Shareholders shall appoint _______________, _______________, and _______________ as the Commented [B14]: Name of Director.

Directors of the Company (collectively known as the “Directors” and individually, the “Director”), who
will collectively comprise the Board of Directors.

7.2. The Board of Directors shall come under a duty to act in the best interests of the Company, as distinct
from protecting the interests of any specific Shareholder(s) or group(s) of Shareholder.

7.3. The Shareholders shall appoint _______________ as the Chairman of the Board of Directors. Commented [B15]: Name of Chairman of the Board of
Directors.

7.4. No additional Directors shall be appointed to the Board of Directors without the unanimous consent of
the Shareholders.

8. MANAGEMENT FUNCTIONS

8.1. All management decisions, other than _______________, shall be made by the Board of Directors Commented [B16]: In this sub-clause you can restrict the board
of directors from exercising a particular company decision. The
informally or in a meeting as the Board deems fit. person named in sub-clause 9.4 shall have control over this
decision.

8.2. The Board of Directors may delegate any of its functions to any Director or person as it shall see fit.

8.3. The Shareholders shall appoint _______________ as the Managing Director of the Company. Commented [B17]: Name of Managing Director, which is a
position equivalent to that of a CEO.

8.4. The Board of Directors shall confer upon the Managing Director such powers or authority as may be
exercisable by them in the conduct of the day-to-day operations of the Company.

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 8.5. _______________ shall have exclusive control over management decisions concerning
_______________.

9. OPERATION OF THE BOARD OF DIRECTORS

9.1. The Board of Directors may make their decisions informally or in a meeting of the Board.

9.2. Decisions of the Board of Directors shall be decided by a majority of votes, with each Director entitled
to one vote.

9.3. In the case of a deadlock in a vote by the Board of Directors, the Chairman of the Board of Directors
shall be entitled to one additional vote.

10. MATTERS REQUIRING 75% BOARD APPROVAL

10.1. The following matters require the approval of at least 75% of the Board of Directors:

10.1.1. Appointment or replacement of the Managing Director.

10.1.2. Acquisition of any business interests or shareholdings by the Company.

10.1.3. Contracting of any transaction involving a consideration greater than S$_______________ by

the Company.

10.1.4. Contracting of any transaction outside the normal course of business of the Company.

10.1.5. Disposal of the whole or parts of the business or assets of the Company outside the normal
course of business of the Company.

10.1.6. Guarantees of any debt or obligations by the Company.

10.1.7. Issuance of any secured debt obligations by the Company.

10.1.8. Loans extended by the Company.

10.1.9. Payment of any cash or stock dividends to the Shareholders of the Company.

10.1.10. Appointment or replacement of directors to the Board of Directors.

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 10.1.11. Changes to the authorised or issued capital of the Company.

10.1.12. Issue, redemption, or purchase of any Shares of the Company.

10.1.13. _______________.

11. MATTERS REQUIRING 100% SHAREHOLDER APPROVAL

11.1. The following matters require the unanimous approval of all the Shareholders:

11.1.1. Appointment or replacement of directors to the Board of Directors.

11.1.2. Changes to the authorised or issued capital of the Company.

11.1.3. Issue, redemption, or purchase of any Shares of the Company.

11.1.4. _______________.

12. ACCESS TO COMPANY RECORDS

12.1. The Company’s records are to be kept at

_______________________________________________________, and every Shareholder may,
when he thinks fit, have access to and inspect and copy any of those records.

12.2. The Company’s records shall include but is not limited to the following materials:

12.2.1. Accounting records;

12.2.2. Minutes of Board and Shareholder meetings;

12.2.3. Contracts and records of business transacted; and

12.2.4. _______________.

13. CONFIDENTIALITY

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 13.1. Unless the consent of the Board of Directors is obtained, each of the Shareholders undertakes that he
shall not divulge or make known to any other person or use for the benefit of himself or any other
person, persons or corporation any of the confidential information of the Company.

13.2. Confidential information generally refers to information not available to the public, and includes:

13.2.1. Client lists and details;

13.2.2. Trade secrets;

13.2.3. Business plans;

13.2.4. Financial information;

13.2.5. Employee lists and details;

13.2.6. Information known to the Employee to be confidential;

13.2.7. Information which may affect the competitive position of the Employer; and

13.2.8. Any information the Employer is obligated not to disclose.

13.3. Each of the Shareholders acknowledges and agrees, having had the opportunity to take legal advice
thereon, that this clause 13 is reasonable and necessary to protect the interests of the Employer.

14. INTELLECTUAL PROPERTY RIGHTS

14.1. All intellectual and industrial property rights arising out of or in connection with the Shareholder’s
Company-related activities shall immediately be assigned to and vest in the Company or any other
persons or entity as appointed by the Company.

15. NO COMPETITION

15.1. Without the prior written consent of all the other Shareholders, each Shareholder undertakes that he
shall not at any time, directly or indirectly, engage in any other businesses which is the same as,
similar to, or competes with the current or contemplated business of the Company, in any capacity
which includes positions such as an advisor, volunteer, employee, agent, partner, director, principal,
shareholder, or contractor.

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 15.2. Without the prior written consent of all the other Shareholders, each Shareholder undertakes that he
shall not at any time:

15.2.1. Entice, induce or encourage a client of the Employer to transfer or remove business from the
Employer;

15.2.2. Solicit or accept business from a client of the Employer for a business which is the same as,
similar to, or competes with the current or contemplated business of the Employer;

15.2.3. Entice, induce or encourage an employee of the Employer to terminate the employee’s
employment with the Employer; and

15.2.4. Directly or indirectly interfere or seek to interfere with the continuance of goods or services
supplied to the Employer.

15.3. Without the prior written consent of all the other Shareholders, each Shareholder undertakes that he
shall not at any time use any name in such a way that causes confusion in the name or goodwill of the
Company, in relation to any trade, business, or corporation.

15.4. Each Shareholder acknowledges and agrees, having had the opportunity to take legal advice thereon,
that this clause 15 is reasonable and necessary to protect the interests of the Company.

16. TERMINATION

16.1. This Agreement shall continue in force until terminated by the provisions herein.

16.2. This Agreement may be terminated by mutual consent of all the Shareholders.

16.3. This Agreement shall terminate immediately if an effective resolution is passed to wind up the
Company.

17. REPRESENTATION AND WARRANTIES
17.1. Each Shareholder represents and warrants that he is not a party to any other agreement which would
Commented [B18]: Representations and warranties are
statements of fact made by a party to the agreement. For example,
a shareholder may claim that he has a PhD. in Computer Science,
making him a valuable addition to the team. Inserting his claim
within this clause ensures the veracity of his claim.

restrict his ability to perform his obligations under this Agreement.

18. SUPREMACY OF SHAREHOLDERS’ AGREEMENT

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 18.1. In the event of any inconsistency between this Agreement and the Memorandum and Articles of
Association of the Company, the terms of this Agreement shall prevail and the Shareholders shall alter
the Memorandum or Articles of Association as soon as practicable to remove such inconsistency.

19. GOVERNING LAW AND JURISDICTION

19.1. This Agreement shall be governed by and construed in accordance with Singapore law.

19.2. In relation to any legal action or proceedings arising out of or in connection with this Agreement, the
Shareholders hereby irrevocably submits to the non-exclusive jurisdiction of the courts of Singapore.

20. MISCELLANEOUS

20.1. This Agreement constitutes the complete understanding of the Shareholders and supersedes any and
all other contracts, representations, and arrangements, whether oral or in writing, heretofore made by
the Shareholders with reference to the subject matter hereof.

20.2. No modification or waiver of any provision in this Agreement shall be valid unless in writing and signed
by all Shareholders.

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IN ACCEPTANCE OF THIS AGREEMENT the Parties have signed their names below:

SIGNED BY: SIGNED BY:

_______________________ _______________________
(Signature of Shareholder or representative) (Signature of Shareholder or representative)

_______________________ _______________________
(Name of Shareholder) (Name of Shareholder)

_______________________ _______________________
(NRIC/FIN or UEN of Shareholder) (NRIC/FIN or UEN of Shareholder)

_______________________ _______________________
(Date of Signing) (Date of Signing)

SIGNED BY: SIGNED BY:

_______________________ _______________________
(Signature of Shareholder or representative) (Signature of Shareholder or representative)

_______________________ _______________________
(Name of Shareholder) (Name of Shareholder)

_______________________ _______________________
(NRIC/FIN or UEN of Shareholder) (NRIC/FIN or UEN of Shareholder)

_______________________ _______________________
(Date of Signing) (Date of Signing)

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