A Shareholders Agreement is a private agreement/document regulating private matters between the parties (including for example funding, breach & disputes), whereas the Memorandum of Incorporation is a public document/certificate issued by the Companies office (CIPC) and will only include the provisions as set out in the Companies Act. Usually this document will be the standard form MOI issued by CIPC and therefore will not cater for the private needs/agreement of the shareholders.

The effect of the aforesaid, is that shareholders should have both an MOI and a Shareholders Agreement.

It is recommended that this Shareholders Agreement be purchased, together with the Memorandum of Incorporation Precedent.

Clauses in this Agreement include:

• The Shareholders details
• Shares held by the shareholders (percentage)
• Meetings
• Quorum for meetings
• Voting rights
• Appointment of directors and removal
• Funding of working capital and additional funding
• Restricted matters / decisions which require a special resolution (as a minimum) – include items which are important decisions as which require more than an ordinary resolution of 51%
• Breach – and deemed offers
• Confidential information
• Disputes
• Pre-emptive rights / sale of shares to third parties