Do we need a shareholders' agreement?

What the articles cannot do

The articles of association bind the company, are filed with the commercial register for anyone to read, and can only choose from a limited statutory menu (Art. 626 CO). They cannot commit a founder to stay, to sell shares on leaving, to vote a certain way, to refrain from competing, or to fund the company when it needs money. They cannot say what happens when two 50/50 shareholders stop agreeing.

The articles can restrict share transfers, and a company with registered shares can refuse a transferee on the grounds the articles set out (Art. 685b CO). But that is a veto, not a plan. Everything else is a matter of contractual promises between the shareholders themselves, which is precisely what a shareholders' agreement is: a private contract, invisible to the register, enforceable between its parties.

What a shareholders' agreement typically covers

• Vesting and leaver provisions: what happens to a founder's shares on an early exit, and on what terms they are bought back.
• Transfer restrictions: rights of first refusal, pre-emption, prohibited transfers.
• Drag-along and tag-along rights, so a sale of the company can actually happen and no one is left behind.
• Board composition, reserved matters and veto rights.
• Information rights, dividend policy and financing obligations.
• Non-compete undertakings and confirmation that IP sits with the company.
• Deadlock and dispute mechanisms, so a stalemate has a defined exit.

None of this needs to be exotic. A focused agreement covering these points is a modest drafting exercise compared to what it prevents.

There is one outer limit worth knowing. A shareholders' agreement is a contract, and a party bound excessively, in scope or in duration, can invoke Art. 27 para. 2 CC and refuse performance (BGE 143 III 480). Perpetual lock-ups are therefore worth less than they look.

The cost of not having one

The pattern is always the same. A founder leaves early and keeps the full stake, forever, while the others build the value. Or two equal shareholders fall out, and every decision that needs both of them stops: no budget, no hires, no financing.

Company law's default answers to this are crude and slow. Nobody can be forced to sell, and the sharpest statutory remedy, a dissolution action, destroys the very thing everyone is fighting over. In that vacuum the shareholder with the least to lose has the most leverage, and buying peace becomes expensive.

Investors know this, which is why any serious financing will require a shareholders' agreement anyway, negotiated then under time pressure and on the investor's terms.

What to do

Sign the agreement when you incorporate, or at the latest while everyone still agrees. Its whole value lies in being negotiated before it is needed. Keep it short enough that everyone actually understands it, and revisit it at each financing round or change in the shareholder base. If you are past that point and a conflict is already brewing, take advice before positions harden. We are happy to discuss your specific situation.