Shareholders agreement is usually drafted when incorporating the company to define the decision making and financing of the company, dividend distribution, composition of the Board, working liability of the founders and future transfers of the shares of the company. Shareholders agreement is necessary also in share purchase deal when the seller remains as a shareholder of the target company or when the company acquires external financing by issuing shares to the funders in the funding round.
Shareholders agreement is not a mandatory document as e.g. Articles of association is. A well drafted shareholders agreement sets the rules to be followed in ownership and decision making related to the company and prevents disputed and negotiation need in later situations. It is recommended to draft a shareholders agreement regardless the size of the company.