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Is a Shareholder’s Agreement different from the Company’s constitution?
Is a Shareholder’s Agreement different from the Company’s constitution?
Sriyanka Nakarmi avatar
Written by Sriyanka Nakarmi
Updated over a week ago

Yes, the constitution of a company is a legal document that sets out how the company is to be internally governed by the rules and regulations found therein. For example, it covers matters such as the quorum required for the conduct of a board or shareholders’ meeting, the appointment of directors and the powers of directors amongst others. 

On the other hand, a Shareholder’s Agreement covers other matters that sets out the understanding between the partners. For example, whether the partners can compete in the same line of business as the company and what happens when there is a deadlock amongst them. Whilst there is definitely some overlap between the two documents, there are some differences but both are equally important. Lastly, the constitution is a public document that can be purchased online whilst a Shareholder’s Agreement is a private agreement that is confidential.

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