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Shareholder Agreement
I need a shareholder agreement for a small Danish startup with three founders, outlining equity distribution, decision-making processes, and exit strategies, while ensuring compliance with Danish corporate laws and including a clause for resolving disputes through mediation.
What is a Shareholder Agreement?
A Shareholder Agreement acts as the rulebook between owners of a Danish company, spelling out their rights, responsibilities, and relationships. It covers crucial aspects like how to handle share transfers, make key business decisions, and resolve disputes between shareholders - going beyond what's required in standard corporate bylaws.
Under Danish company law, these agreements help protect both majority and minority shareholders by setting clear procedures for board appointments, profit distribution, and exit strategies. While not legally mandatory in Denmark, a well-crafted Shareholder Agreement becomes especially valuable when dealing with foreign investors or managing family-owned businesses, as it provides extra security and clarity beyond the basic requirements of the Danish Companies Act.
When should you use a Shareholder Agreement?
Create a Shareholder Agreement when starting a new Danish company or bringing in new investors - especially before any conflicts or challenges arise. This agreement becomes essential when multiple shareholders have different visions for the company, varying levels of involvement, or distinct financial contributions.
The timing matters most during major company changes: before accepting venture capital, when planning succession in family businesses, or structuring different share classes. Danish companies particularly benefit from setting these terms early when dealing with international investors, implementing specific voting rights, or establishing clear procedures for share transfers and exits. Having these rules in place prevents costly disputes and protects everyone's interests.
What are the different types of Shareholder Agreement?
- Joint Venture And Shareholders Agreement: Specifically designed for partnerships between companies, defining operational control and profit sharing
- Shareholder Loan Agreement: Focuses on terms for shareholders lending money to the company
- Company Shareholder Agreement: Standard comprehensive agreement for established businesses with multiple shareholders
- Startup Shareholder Agreement: Tailored for early-stage companies, including provisions for future funding rounds
- Investment Shareholder Agreement: Focuses on investor rights, exit strategies, and special voting privileges
Who should typically use a Shareholder Agreement?
- Company Founders: Establish initial terms and ownership structure when creating the company, often working with legal advisors to set fair conditions
- Private Investors: Join existing companies through share purchases, requiring clear rights and responsibilities in the Shareholder Agreement
- Corporate Lawyers: Draft and review agreements to ensure compliance with Danish law and protect client interests
- Board Members: Implement and follow governance rules outlined in the agreement while managing company affairs
- Family Business Owners: Use agreements to manage succession planning and maintain family control across generations
- Venture Capital Firms: Require specific terms and protections when investing in Danish startups
How do you write a Shareholder Agreement?
- Basic Company Details: Gather CVR number, registered address, and current ownership structure
- Shareholder Information: Collect names, contact details, and ownership percentages of all shareholders
- Share Classes: Define different types of shares and associated voting rights
- Transfer Rules: Decide on procedures for selling shares, including right of first refusal terms
- Decision Making: Outline voting requirements for key business decisions
- Exit Strategy: Plan procedures for shareholder departures or company sale
- Profit Distribution: Specify dividend policies and profit-sharing arrangements
- Document Generation: Use our platform to create a legally compliant agreement that includes all required elements under Danish law
What should be included in a Shareholder Agreement?
- Party Details: Full legal names and addresses of all shareholders and the company
- Share Structure: Detailed breakdown of share classes, voting rights, and ownership percentages
- Transfer Restrictions: Rules for selling or transferring shares, including pre-emptive rights
- General Meetings: Procedures for conducting meetings and making key decisions
- Board Composition: Rules for appointing and removing board members
- Dividend Policy: Terms for profit distribution and reinvestment
- Dispute Resolution: Clear procedures for handling disagreements under Danish law
- Exit Mechanisms: Procedures for shareholder withdrawal or company sale
- Confidentiality: Terms protecting company secrets and sensitive information
What's the difference between a Shareholder Agreement and a Business Acquisition Agreement?
A Shareholder Agreement differs significantly from a Business Acquisition Agreement. While both deal with company ownership, they serve distinct purposes in Danish corporate law.
- Timing and Duration: Shareholder Agreements govern ongoing relationships between company owners, while Business Acquisition Agreements handle one-time ownership transfers
- Scope of Coverage: Shareholder Agreements outline voting rights, profit sharing, and management decisions; Business Acquisition Agreements focus on purchase terms, warranties, and asset transfers
- Party Involvement: Shareholder Agreements bind multiple owners simultaneously; Business Acquisition Agreements typically involve just seller and buyer
- Legal Framework: Shareholder Agreements operate under Danish company law for continuous governance; Business Acquisition Agreements fall under transaction and contract law for specific deals
- Modification Process: Shareholder Agreements often include mechanisms for updates as company needs change; Business Acquisition Agreements usually remain fixed after closing
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