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Kagaznama

Shareholders' Agreement

At a glance

Price
Free
Stamp duty
Chargeable as an agreement.
Registration
Not registrable under the Registration Act, 1908 — it creates no interest in immovable property and is not on the s.17 list.
Witnesses
Not legally required for a document of this kind.

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Also called

  • SHA
  • Shareholder Agreement
  • Shareholders Agreement for Private Limited Company
  • Ansh Dharak Samjhauta
  • ਸ਼ੇਅਰਧਾਰਕ ਸਮਝੌਤਾ
  • अंशधारक करार
  • Investor Rights Agreement
  • Share Purchase and Shareholders Agreement (governance part)

When you need it

The Shareholders of a private limited company already incorporated in Punjab or Chandigarh — founders together, or founders and an investor — who want to fix, beyond what the Articles of Association say, how the board is composed, which decisions need more than an ordinary board or general-meeting majority, how shares may be transferred (right of first refusal, tag-along, drag-along), dividend policy, information rights, and how a dispute between Shareholders is resolved. This Agreement works alongside the company's Memorandum and Articles of Association and the Companies Act, 2013.

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Where this Agreement and the Articles conflict, the Articles bind the company and third parties dealing with it; clause 16 deals with what the Shareholders undertake to do about that gap. Not for: the company's own constitutional document (that is the Memorandum and Articles of Association, filed with the Registrar of Companies); a partnership firm or LLP, which has no shares (use the Partnership Deed or LLP Agreement); or the pre-incorporation stage among co-founders only, for which the Founders' Agreement in this library is the better starting point.

Whether you can fill this in here

You can fill this in here

You can fill this one in on this site, and read the whole draft on screen before you decide anything about it. It is a carefully drafted template; it is not advice about your own facts.

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See stamp duty, registration and witnesses

What follows is written for Punjab and Chandigarh. It states the position there rather than describing how it varies, so the amounts below are the ones that apply — worth confirming at the sub-registrar’s office, because rates change. If the property is anywhere else in India, none of this is yours.

Stamp duty

Chargeable as an agreement. PUNJAB: Article 5, Schedule I-A to the Indian Stamp Act, 1899 as applicable in Punjab; where no more specific sub-clause of Article 5 fits, the residuary rate under Article 5(c). Confirm the current figure with the Sub-Registrar or against the Department of Revenue, Rehabilitation and Disaster Management's published table at revenue.punjab.gov.in before the stamp is bought. CHANDIGARH: the equivalent agreement article under the Chandigarh Administration's Rates of Stamp Duty & Registration Fees table at revenue.chd.gov.in; confirm the current figure at the Sub-Registrar's office, 30 Bays Building, before the stamp is bought. BOTH: this Agreement does not itself transfer or allot shares. A concurrent allotment (Form PAS-3) is not separately stamped as a transfer; an actual transfer of existing shares (Form SH-4) is separately chargeable as an instrument of transfer of securities, at the rate the Indian Stamp Act, 1899 (as amended with effect from 1 July 2020 for transactions in securities) fixes, and for a demat transfer that duty is collected through the depository rather than by affixing a stamp to a physical instrument.

Registration

Not registrable under the Registration Act, 1908 — it creates no interest in immovable property and is not on the s.17 list. It is not itself filed with the Registrar of Companies, but where it changes something the Companies Act, 2013 requires to be reflected in the Articles of Association or in a special resolution — for instance a restriction on transfer binding on the company itself, rather than merely between Shareholders — that change should be carried into the Articles by special resolution and filed as Form MGT-14, so that it is enforceable against the company and not merely as a contract between the signing Shareholders.

Notarisation

Not legally required. Notarisation is sometimes done to fix the date on which the Shareholders' arrangement was reached.

Witnesses

Not legally required for a document of this kind. Two witnesses are optional and not asked for by this template; add them if the Shareholders want the extra evidentiary comfort.

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Sample preview — placeholder answers, not your data

SHAREHOLDERS' AGREEMENT

This Shareholders' Agreement (this "Agreement") is made at Chandigarh on 1 April 2026.

BETWEEN

  1. 1. Rohit Nair, of House No. 1204, Sector 33-C, Chandigarh 160020, PAN AAECN5678L, holding 5,000 equity shares (50%) ("First Shareholder");
  1. 2. Kavita Bansal, of Shop No. 22, Sector 22-C, Chandigarh 160022, PAN AFRPB2212K, holding 5,000 equity shares (50%) ("Second Shareholder");

and the additional Shareholders named in the Schedule to this Agreement;

together the "Shareholders", each a "Shareholder", in relation to

Northline Analytics Private Limited, CIN U70109CH2022PTC012345, having its registered office at Plot No. 8, Phase 8-B, Industrial Area, S.A.S. Nagar (Mohali) 160055 (the "Company"), each equity share having a face value of ₹10 (Rupees Ten only) and the total paid-up equity share capital of the Company being ₹10,00,000 (Rupees Ten Lakh only).

RECITALS

A. The Shareholders together hold the whole, or substantially the whole, of the paid-up equity share capital of the Company.

B. The Shareholders wish to record how the Company is governed and how its shares may be dealt with, alongside its Memorandum and Articles of Association.

NOW THIS AGREEMENT WITNESSES AS FOLLOWS.

  1. 1. SHAREHOLDING

1.1 The Shareholders' holding in the Company is as stated in the parties clause above and, for any additional Shareholders, in the Schedule to this Agreement.

  1. 2. RELATIONSHIP WITH THE ARTICLES OF ASSOCIATION

2.1 This Agreement is additional to, and does not by itself amend, the Memorandum and Articles of Association of the Company. Where this Agreement requires a particular provision to bind the Company or a person who is not a party to it, the Shareholders shall procure that the Articles of Association are amended by special resolution, and filed with the Registrar of Companies, to the extent needed to give that provision effect.

  1. 3. THE BOARD

3.1 The Board shall consist of 4 directors.

3.2 Each Shareholder holding at least the threshold stated below of the paid-up equity share capital may nominate one director to the Board by written notice to the company, and may replace that nominee at any time by further written notice

3.3 That threshold is 20% of the paid-up equity share capital.

3.4 Quorum for a meeting of the Board is 2 directors, present throughout the meeting, consistently with section 174 of the Companies Act, 2013.

3.5 Not less than 7 days' written notice of a Board meeting shall be given to every director, consistently with section 173(3) of the Companies Act, 2013.

3.6 The Chairperson of the Board shall be elected by the Board from among its members and shall not have a second or casting vote

  1. 4. GENERAL MEETINGS

4.1 The Shareholders shall exercise their votes in general meeting consistently with this Agreement, and in particular shall not vote in favour of a resolution on a reserved matter listed in clause 6 unless the consent required by that clause has first been obtained.

What this document is for

The shareholders of a private limited company already incorporated in Punjab or Chandigarh — founders together, or founders and an investor — use this to fix how the board is composed, which decisions need more than an ordinary majority, how shares may be transferred, dividend policy, information rights, and how a dispute between shareholders is resolved, all beyond what the company's Articles of Association say.

It works alongside the Memorandum and Articles of Association and the Companies Act, 2013, rather than replacing either — a separate document for the shareholders' own private bargain, on top of the company's public constitutional one.

Before you use this — this Agreement and the Articles of Association can pull in different directions

As between the Shareholders who sign it, this Agreement prevails over the Articles of Association wherever the two conflict, and the Shareholders are expected to vote and act to bring the Articles into line with it. But as against the company itself, and anyone else dealing with it, the Articles of Association prevail unless and until they are actually amended by special resolution and filed with the Registrar of Companies — a right this Agreement gives a Shareholder is not automatically something the company, or a transferee who never signed it, has to honour.

Stamp paper and registration

Stamp paper needed

Yes

Typical stamp duty — Punjab

Ask us — Chargeable under the residuary agreement rate, Article 5(c) of Schedule I-A — this Agreement's own drafting note gives the article, not a rupee figure, because the table moves. Confirm the current figure with the Sub-Registrar or against the Department of Revenue, Rehabilitation and Disaster Management's published table before the stamp is bought.

Typical stamp duty — Chandigarh

Ask us — The equivalent agreement article applies, with the same gap — no fixed figure in the template's own source. Confirm at the Sub-Registrar's office, 30 Bays Building, before the stamp is bought.

Registration at the Sub-Registrar

No — Not registrable under the Registration Act, 1908, and not itself filed with the Registrar of Companies. Where this Agreement fixes something that needs to bind the company itself and not just the signing Shareholders — a transfer restriction the board can refuse to register, say — that has to be separately carried into the Articles of Association by special resolution and filed as Form MGT-14.

Notary or witnesses

Not required by law. Two witnesses are optional and not asked for by this template. Notarisation is sometimes done anyway, to fix the date the Shareholders' arrangement was actually reached.

What you will need before you start

  • The company's name, CIN, registered office, face value per share and total paid-up capital
  • Every Shareholder's identity, address, PAN, and the shares and percentage they hold
  • The board's size, quorum and whether any Shareholder has a right to nominate a director
  • Which matters need more than an ordinary majority, and the exact consent standard for them
  • Whether a lock-in period applies, and the right-of-first-refusal, tag-along and drag-along terms for a share transfer
  • Dividend policy, and which Shareholders are entitled to receive quarterly financial information

Common mistakes

  • Assuming a right this Agreement gives — a right of first refusal, a board seat — automatically binds the company or a later transferee, when it needs to be carried into the Articles of Association to do that.
  • Leaving ESOP shares or an option pool unaddressed, when this Agreement assumes they are governed separately by their own scheme rather than by the transfer and reserved-matter mechanisms here.
  • Setting the reserved-matters consent threshold without checking it against section 180 of the Companies Act, 2013, which already fixes its own special-resolution threshold for some of the same decisions — borrowing beyond capital and free reserves, for instance.

Questions people ask before using this document

Does this Agreement override the company's Articles of Association?

Only between the Shareholders who signed it. As against the company itself, and against anyone dealing with it who is not bound by this Agreement, the Articles of Association still govern until they are actually amended by special resolution and filed with the Registrar of Companies.

What is a drag-along right, and why would a minority shareholder agree to one?

It lets Shareholders holding a stated majority force the remaining Shareholders to sell their shares too, on the same price and terms, when they approve a genuine sale of the whole company — without it, a single small holdout could block a sale everyone else wants. The usual trade-off a minority shareholder gets in return is a tag-along right, which lets them join a sale they did not initiate on the same terms.

Do we still need this Agreement if we already have a Founders' Agreement?

Usually yes, once outside shareholders are involved — a Founders' Agreement is meant for the pre-incorporation stage among co-founders and does not typically address an investor's board seats, information rights or exit mechanics. This Agreement should state expressly which clauses of the earlier one, if any, continue to apply.

How much stamp duty does a Shareholders' Agreement attract in Punjab and Chandigarh?

The residuary agreement article applies in both places, but neither this Agreement's own source nor a current dated table fixes a rupee figure. Confirm with the Sub-Registrar, or against the two revenue departments' published tables, before the stamp is bought.

Can a Shareholder be stopped from competing with the company after selling their shares?

Not broadly. Section 27 of the Indian Contract Act, 1872 voids a restraint of that kind outside narrow exceptions a departing shareholder does not fall within, unlike a partner leaving a firm, where the Indian Partnership Act, 1932 gives an express exception. This Agreement deliberately does not attempt a broad restraint here.

Related documents, and when you would need them

  • Founders' Agreement

    For the pre-incorporation stage among co-founders only — the better starting point before outside shareholders are involved.

  • LLP Agreement

    If the business is actually structured as a Limited Liability Partnership, which has no shares for this Agreement to speak to.

  • Non-Disclosure Agreement (NDA)

    Before sharing the company's financial and business information with a prospective investor, ahead of them becoming a Shareholder under this Agreement.

  • Non-Compete/Confidentiality Agreement

    For a Shareholder who is also an employee, if the company wants a stand-alone confidentiality and non-solicitation covenant beyond what this Agreement gives between Shareholders.

Questions about this document

Does the Shareholders' Agreement need stamp paper or stamp duty in Punjab and Chandigarh?

Chargeable as an agreement.

See the full position on stamp duty, registration and witnesses
Does the Shareholders' Agreement need registration in Punjab and Chandigarh?

Not registrable under the Registration Act, 1908 — it creates no interest in immovable property and is not on the s.17 list.

See the full position on stamp duty, registration and witnesses
What does the Shareholders' Agreement cost on Kagaznama?

Free.

Documents are free. Only kits are paid.

Does the Shareholders' Agreement need witnesses?

Not legally required for a document of this kind.

See the full position on stamp duty, registration and witnesses

Often needed with this document

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