According to Orange County business attorney, Tawny Mazarei, a California corporation shareholder agreement is a legal document that outlines the rights, obligations, and relationships among the shareholders of a corporation based in the state of California. It is a private contract and is not typically filed with any government agency. The specific content of a California corporation shareholder agreement can vary based on the preferences and needs of the shareholders involved, but it generally covers key aspects of corporate governance and ownership.

Here are some common elements that may be included in a California corporation shareholder agreement:

• Ownership and Issuance of Shares: Details on the initial distribution of shares, any restrictions on the transfer of shares, and procedures for future issuances.
• Voting Rights: Specifies the voting rights of shareholders, including major decisions that require shareholder approval.
• Management and Decision-Making: Outlines how the company will be managed, including the role of the board of directors and any specific decision-making processes.
• Dividends and Distributions: Addresses the company’s dividend policy and procedures for the distribution of profits among shareholders.
• Transfer of Shares: Includes provisions regarding the sale or transfer of shares, including any pre-emptive rights or rights of first refusal.
• Buy-Sell Agreements: Details mechanisms for buying or selling shares in the event of certain triggering events, such as death, disability, or voluntary exit of a shareholder.
• Dispute Resolution: Establishes procedures for resolving disputes among shareholders, which may include mediation, arbitration, or other methods.
• Confidentiality and Non-Compete Clauses: Includes provisions to protect sensitive company information and may restrict shareholders from engaging in certain competitive activities.
• Dissolution: Outlines the procedures for the dissolution of the corporation and the distribution of assets among shareholders.

It’s important to note that while California law provides a legal framework for corporations, including the California Corporations Code, the shareholder agreement is a private contract and can be customized to suit the specific needs and preferences of the shareholders involved. Consulting with legal professionals who are familiar with California corporate law is advisable when drafting or reviewing a shareholder agreement to ensure compliance with applicable regulations and to address the unique circumstances of the corporation. Please feel free to contact our law firm for any question about forming a California corporation and any other business law matter.