Document background
The Shareholder Buy Sell Agreement serves as a crucial governance document for Indian companies with multiple shareholders, providing a clear framework for managing ownership transitions and protecting shareholder interests. This agreement becomes essential when companies need to address potential future scenarios such as shareholder exits, deaths, or business disputes. It typically includes detailed provisions for share valuation, transfer procedures, and restrictions on share transfers, all while ensuring compliance with Indian corporate law, particularly the Companies Act, 2013, SEBI regulations (for listed entities), and relevant tax laws. The agreement helps prevent potential conflicts by establishing clear procedures for various trigger events and protecting both majority and minority shareholder rights through mechanisms such as right of first refusal, tag-along rights, and drag-along rights.
