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Free Shareholders Agreement Template for India
Protect shareholder rights in your Indian private limited company with a comprehensive Shareholders Agreement aligned with the Companies Act 2013. Our template covers share transfer restrictions, voting rights, reserved matters, drag-along and tag-along rights, and dispute resolution through arbitration or the NCLT.
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SHAREHOLDERS AGREEMENT
THE COMPANY
TechVenture Innovations Private Limited
Unit 12, Bandra Kurla Complex, Mumbai - 400 051
CIN: U74999MH2020PTC345678
CIN: U74999MH2020PTC345678
SHAREHOLDER 1
Rahul Sharma
Flat 4A, Sea Breeze Towers, Worli, Mumbai - 400 018
PAN: ABCRS1234F
PAN: ABCRS1234F
SHAREHOLDER 2
Priya Mehta
Villa 7, Koregaon Park, Pune - 411 001
PAN: ABCPM5678G
PAN: ABCPM5678G
RE: Shareholders Agreement — TechVenture Innovations Private Limited
Effective: 25 April 2026
COMPANY DETAILS
| COMPANY | TechVenture Innovations Private Limited |
| COMPANY TYPE | Private Limited Company |
| CIN | U74999MH2020PTC345678 |
| REGISTERED OFFICE | Unit 12, Bandra Kurla Complex, Mumbai - 400 051 |
| AUTHORISED CAPITAL | 1,00,00,000.00 INR |
| PAID-UP CAPITAL | 10,00,000.00 INR |
| STATE | Maharashtra |
| SHARE CLASS | equity shares |
| SHAREHOLDER 1 | Rahul Sharma — 6000 shares (60%) |
| SHAREHOLDER 2 | Priya Mehta — 4000 shares (40%) |
This Shareholders Agreement ("Agreement") is entered into as of 25 April 2026 by and among TechVenture Innovations Private Limited ("Company"), a Private Limited Company incorporated under the Companies Act, 2013 ("CA 2013") with its registered office at Unit 12, Bandra Kurla Complex, Mumbai - 400 051, CIN: U74999MH2020PTC345678; Rahul Sharma ("Shareholder 1"), holding 6000 equity shares (60% of the paid-up share capital); and Priya Mehta ("Shareholder 2"), holding 4000 equity shares (40% of the paid-up share capital). Each of Shareholder 1 and Shareholder 2 is referred to individually as a "Shareholder" and collectively as the "Shareholders". This Agreement is made under and shall be governed by the Indian Contract Act, 1872 ("ICA 1872"), CA 2013, the Specific Relief Act, 1963, and the Arbitration and Conciliation Act, 1996 ("ACA 1996").
1.
PURPOSE AND INTERPRETATION
The Shareholders are entering into this Agreement to record their mutual rights and obligations as shareholders of the Company, to regulate the management and operation of the Company, and to provide for the transfer, acquisition, and disposal of shares in the Company. The Company's Memorandum and Articles of Association and this Agreement shall be read together; in the event of any conflict between this Agreement and the Articles, the Parties shall promptly amend the Articles to conform with this Agreement, to the extent permissible under CA 2013. Unless the context otherwise requires, references to "shares" mean the equity shares of the Company. The authorised capital of the Company is 1,00,00,000.00 INR, and the paid-up capital is 10,00,000.00 INR as at the Effective Date (CA 2013 s. 88 — register of members). Equity shares and preference shares shall carry the rights set out in CA 2013 s. 47.
2.
SHAREHOLDER RIGHTS
Pre-Emptive Rights: If the Company proposes to issue new shares or securities, each Shareholder shall have a pre-emptive right to subscribe to new shares pro-rata to their existing shareholding at the time of issuance ("Pre-Emptive Right"). The Company shall provide at least 21 days' prior written notice of any proposed new issuance. If a Shareholder does not exercise their Pre-Emptive Right within the notice period, the remaining Shareholders may take up the unsubscribed shares on a pro-rata basis before any third party subscription is permitted. This clause is subject to CA 2013 s. 62 (rights issue provisions).
Right of First Refusal (ROFR): Before transferring any shares to a third party, the transferring Shareholder ("Selling Shareholder") must first offer those shares to the other Shareholder(s) in writing at the same price and on the same terms as proposed to the third party. The non-selling Shareholder(s) shall have 30 days to exercise the right of first refusal. If the right is not exercised within that period, the Selling Shareholder may transfer the shares to the third party on terms no more favourable than those offered, within 60 days. This right is consistent with transfer restrictions applicable to private limited companies under CA 2013 s. 111A and Table F articles.
Right of First Refusal (ROFR): Before transferring any shares to a third party, the transferring Shareholder ("Selling Shareholder") must first offer those shares to the other Shareholder(s) in writing at the same price and on the same terms as proposed to the third party. The non-selling Shareholder(s) shall have 30 days to exercise the right of first refusal. If the right is not exercised within that period, the Selling Shareholder may transfer the shares to the third party on terms no more favourable than those offered, within 60 days. This right is consistent with transfer restrictions applicable to private limited companies under CA 2013 s. 111A and Table F articles.
3.
EXIT PROTECTIONS
Anti-Dilution Protection: If the Company issues new shares at a price per share lower than the price paid by either Shareholder (a "Down-Round Issuance"), the Company shall issue such additional shares to each existing Shareholder as may be necessary to preserve their respective percentage shareholding at the pre-issuance level, on a weighted average or full-ratchet basis as agreed between the Parties. Anti-dilution adjustments shall not apply to shares issued: (a) under any employee stock option plan (ESOP) approved by the Board; (b) in connection with a rights issue under CA 2013 s. 62; or (c) as bonus shares under CA 2013 s. 63.
Tag-Along Rights: If Shareholder 1 or Shareholder 2 (the "Selling Shareholder") proposes to transfer shares to a third-party acquirer, the other Shareholder (the "Tag-Along Holder") shall have the right (but not the obligation) to sell their shares to the same acquirer at the same price per share and on the same terms and conditions (the "Tag-Along Right"). The Selling Shareholder shall give the Tag-Along Holder at least 30 days' prior written notice before completing any such transfer.
Drag-Along Rights: If a Shareholder holding more than 50% of the paid-up share capital (the "Dragging Shareholder") negotiates a bona fide arm's-length sale of all their shares to a third-party acquirer, the Dragging Shareholder may require the other Shareholder(s) (the "Dragged Shareholders") to sell their shares to the same acquirer at the same price per share and on the same terms and conditions (the "Drag-Along Right"), subject to 45 days' prior written notice. The Dragging Shareholder warrants to the Dragged Shareholders that the transaction price represents fair market value.
Tag-Along Rights: If Shareholder 1 or Shareholder 2 (the "Selling Shareholder") proposes to transfer shares to a third-party acquirer, the other Shareholder (the "Tag-Along Holder") shall have the right (but not the obligation) to sell their shares to the same acquirer at the same price per share and on the same terms and conditions (the "Tag-Along Right"). The Selling Shareholder shall give the Tag-Along Holder at least 30 days' prior written notice before completing any such transfer.
Drag-Along Rights: If a Shareholder holding more than 50% of the paid-up share capital (the "Dragging Shareholder") negotiates a bona fide arm's-length sale of all their shares to a third-party acquirer, the Dragging Shareholder may require the other Shareholder(s) (the "Dragged Shareholders") to sell their shares to the same acquirer at the same price per share and on the same terms and conditions (the "Drag-Along Right"), subject to 45 days' prior written notice. The Dragging Shareholder warrants to the Dragged Shareholders that the transaction price represents fair market value.
4.
MANAGEMENT AND BOARD GOVERNANCE
Board Composition: Board shall comprise up to 5 directors: 2 nominees of Shareholder 1, 2 nominees of Shareholder 2, and 1 Independent Director mutually agreed upon by both Shareholders.
Quorum: Quorum for all board meetings shall require at least one nominee director of each Shareholder to be present in person or by video conferencing (CA 2013 s. 173).
Reserved Matters: The following matters shall require a supermajority vote or unanimous shareholder approval before the Company proceeds:
The following matters shall require approval of shareholders holding at least 75% of the paid-up share capital:
1. Issuance of new shares or convertible instruments
2. Incurring debt or guarantees exceeding INR 1,00,00,000
3. Acquisition or disposal of assets exceeding INR 50,00,000
4. Amendment of Memorandum or Articles of Association
5. Appointment or removal of the CEO or CFO
6. Winding up, merger, or amalgamation of the Company
Deadlock Resolution: If the Board is unable to resolve a Reserved Matter within 30 days of the first vote, either Party may escalate the matter to the respective founding Shareholders for resolution within 15 days. If the matter remains unresolved, it shall be referred to arbitration under ACA 1996 at Mumbai.
Shareholder Representative: Rahul Sharma for Shareholder 1; Priya Mehta for Shareholder 2.
Quorum: Quorum for all board meetings shall require at least one nominee director of each Shareholder to be present in person or by video conferencing (CA 2013 s. 173).
Reserved Matters: The following matters shall require a supermajority vote or unanimous shareholder approval before the Company proceeds:
The following matters shall require approval of shareholders holding at least 75% of the paid-up share capital:
1. Issuance of new shares or convertible instruments
2. Incurring debt or guarantees exceeding INR 1,00,00,000
3. Acquisition or disposal of assets exceeding INR 50,00,000
4. Amendment of Memorandum or Articles of Association
5. Appointment or removal of the CEO or CFO
6. Winding up, merger, or amalgamation of the Company
Deadlock Resolution: If the Board is unable to resolve a Reserved Matter within 30 days of the first vote, either Party may escalate the matter to the respective founding Shareholders for resolution within 15 days. If the matter remains unresolved, it shall be referred to arbitration under ACA 1996 at Mumbai.
Shareholder Representative: Rahul Sharma for Shareholder 1; Priya Mehta for Shareholder 2.
5.
TRANSFER RESTRICTIONS AND EXIT MECHANISM
Lock-Up Period: For a period of 24 months from the Effective Date (the "Lock-Up Period"), neither Shareholder may transfer, pledge, hypothecate, or otherwise dispose of their shares to any third party without the prior written consent of all other Shareholders, except for Permitted Transfers as set out below.
Permitted Transfers: Each Shareholder may transfer shares to a wholly owned subsidiary or an entity under common control, provided the transferee executes a Deed of Adherence to this Agreement before the transfer.
IPO Provisions: If the Company resolves to undertake an IPO on NSE or BSE, the Shareholders agree to cooperate fully, including conversion of share class and compliance with SEBI (ICDR) Regulations, 2018 lock-in requirements.
Buy-Sell Mechanism (Texas Shoot-Out): In the event of a continuing Deadlock exceeding 90 days, either Shareholder may invoke the buy-sell mechanism by offering to purchase the other's shares at a specified price. The recipient must within 30 days elect to buy or sell at the stated price.
Valuation Methodology: For the purpose of any compulsory or buy-sell transfer under this Agreement, the fair market value of shares shall be determined by EBITDA Multiple, calculated as at the date of the triggering event. If the Parties cannot agree on valuation within 21 days, an independent chartered accountant (jointly nominated or, failing agreement, nominated by the Institute of Chartered Accountants of India) shall determine the valuation, and such determination shall be final and binding.
Permitted Transfers: Each Shareholder may transfer shares to a wholly owned subsidiary or an entity under common control, provided the transferee executes a Deed of Adherence to this Agreement before the transfer.
IPO Provisions: If the Company resolves to undertake an IPO on NSE or BSE, the Shareholders agree to cooperate fully, including conversion of share class and compliance with SEBI (ICDR) Regulations, 2018 lock-in requirements.
Buy-Sell Mechanism (Texas Shoot-Out): In the event of a continuing Deadlock exceeding 90 days, either Shareholder may invoke the buy-sell mechanism by offering to purchase the other's shares at a specified price. The recipient must within 30 days elect to buy or sell at the stated price.
Valuation Methodology: For the purpose of any compulsory or buy-sell transfer under this Agreement, the fair market value of shares shall be determined by EBITDA Multiple, calculated as at the date of the triggering event. If the Parties cannot agree on valuation within 21 days, an independent chartered accountant (jointly nominated or, failing agreement, nominated by the Institute of Chartered Accountants of India) shall determine the valuation, and such determination shall be final and binding.
6.
DIVIDENDS, INTELLECTUAL PROPERTY AND CONFIDENTIALITY
Dividend Policy: The Board shall declare dividends at its discretion, subject to CA 2013 s. 123 and applicable tax withholding requirements under the Income Tax Act, 1961.
Additional policy specified by the Shareholders:
For the first 3 years from the Effective Date, all distributable profits shall be reinvested. Thereafter, a minimum of 20% of distributable profits shall be declared as dividend annually, subject to Board discretion and CA 2013 s. 123. Dividends shall be subject to applicable withholding tax under ITA 1961.
Intellectual Property: All intellectual property created by the Company's employees and contractors shall vest exclusively in the Company.
Additional IP arrangements / carve-outs:
All intellectual property developed by the Company's employees and contractors, including the platform software, algorithms, and brand assets, shall vest exclusively in the Company. No Shareholder shall assert individual ownership of any Company IP.
Confidentiality and DPDPA 2023: Each Shareholder shall keep strictly confidential all non-public information relating to the Company, including compliance with the Digital Personal Data Protection Act, 2023 (DPDPA 2023) where personal data is involved.
Additional confidentiality obligations:
Each Shareholder shall maintain strict confidentiality of all non-public Company information. Where personal data of customers or employees is involved, the Company shall comply with the Digital Personal Data Protection Act, 2023 (DPDPA 2023).
Additional policy specified by the Shareholders:
For the first 3 years from the Effective Date, all distributable profits shall be reinvested. Thereafter, a minimum of 20% of distributable profits shall be declared as dividend annually, subject to Board discretion and CA 2013 s. 123. Dividends shall be subject to applicable withholding tax under ITA 1961.
Intellectual Property: All intellectual property created by the Company's employees and contractors shall vest exclusively in the Company.
Additional IP arrangements / carve-outs:
All intellectual property developed by the Company's employees and contractors, including the platform software, algorithms, and brand assets, shall vest exclusively in the Company. No Shareholder shall assert individual ownership of any Company IP.
Confidentiality and DPDPA 2023: Each Shareholder shall keep strictly confidential all non-public information relating to the Company, including compliance with the Digital Personal Data Protection Act, 2023 (DPDPA 2023) where personal data is involved.
Additional confidentiality obligations:
Each Shareholder shall maintain strict confidentiality of all non-public Company information. Where personal data of customers or employees is involved, the Company shall comply with the Digital Personal Data Protection Act, 2023 (DPDPA 2023).
7.
DISPUTE RESOLUTION AND GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the Republic of India. Any dispute, controversy, or claim arising out of or in connection with this Agreement, or the breach, termination, or validity thereof, shall be referred to and finally resolved by arbitration under the Arbitration and Conciliation Act, 1996 ("ACA 1996"). The seat and venue of arbitration shall be Mumbai, Maharashtra, and proceedings shall be conducted in English by a sole arbitrator mutually appointed by the Parties. If the Parties fail to agree on a sole arbitrator within 30 days of a dispute being notified, either Party may apply to the relevant High Court at Maharashtra for appointment under ACA 1996 s. 11. The arbitral award shall be final and binding. Nothing herein prevents any Party from seeking urgent interim relief from a court of competent jurisdiction under ACA 1996 s. 9.
8.
GENERAL PROVISIONS
Entire Agreement: This Agreement, together with the Company's Memorandum and Articles of Association and any Schedules hereto, constitutes the entire agreement among the Parties with respect to the subject matter hereof. Amendment: No amendment is effective unless made in writing and signed by all Parties. Severability: If any provision is held invalid or unenforceable by a competent court, the remaining provisions shall continue in full force. Waiver: No failure to enforce any provision shall constitute a waiver of future rights. Counterparts: This Agreement may be executed in counterparts. Electronic signatures are valid under the Information Technology Act, 2000 (IT Act 2000 s. 5). SEBI Note: If the Company is listed or proposes to list on a recognised Indian stock exchange, the Parties shall ensure compliance with the Securities and Exchange Board of India Act, 1992 (SEBI Act 1992) and applicable SEBI regulations including SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
THE COMPANY
Authorised Director
Director / Managing Director
TechVenture Innovations Private Limited
Date: ____________________
SHAREHOLDER 1
Rahul Sharma
Date: ____________________
SHAREHOLDER 2
Priya Mehta
Date: ____________________
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What Is a Shareholders Agreement in India?
A Shareholders Agreement (SHA) is a private contract between some or all shareholders of an Indian company that governs their relationship, rights, and obligations with respect to the company. While the Articles of Association (AoA) and the Companies Act 2013 set out the public framework of shareholder rights, an SHA allows shareholders to agree on matters that go beyond or supplement the AoA — such as management participation, share transfer restrictions, information rights, anti-dilution protections, and exit mechanisms. SHAs are particularly important in startups, joint ventures, and private equity investments in India.
In India, the SHA operates alongside the AoA and is binding on the parties who sign it. However, a critical issue under Indian corporate law is that where the SHA conflicts with the AoA, the AoA prevails in disputes with the company itself — though the SHA remains enforceable inter se between shareholders. This is why Indian legal practitioners advise that key protective provisions (such as pre-emption rights and transfer restrictions) be reflected in both the SHA and the AoA to ensure full enforceability against the company and all shareholders.
Indian companies are regulated under the Companies Act 2013, and the SHA must operate within the mandatory provisions of the Act. The National Company Law Tribunal (NCLT) has jurisdiction over oppression and mismanagement disputes under Sections 241 and 242 of the Companies Act 2013. The Securities and Exchange Board of India (SEBI) regulates listed company SHAs. Disputes under Indian SHAs are commonly resolved through arbitration under the Arbitration and Conciliation Act 1996, and Indian courts have increasingly enforced SHA provisions including drag-along, tag-along, and put/call rights.
What's Covered in This Shareholders Agreement Template
Our India-specific SHA template covers all essential provisions for an Indian private limited company under the Companies Act 2013.
Parties & Company Details
Identifies all shareholders, their shareholding percentages, the company name, CIN, and registered office address.
Share Capital & Shareholding
Sets out the existing shareholding structure and provisions for future share issuances, including pre-emption rights to protect against dilution.
Board Composition & Management
Defines each shareholder's right to nominate directors to the board, quorum requirements, and matters requiring unanimous or special majority board approval.
Reserved Matters
Lists decisions requiring shareholder approval above the statutory threshold — such as major acquisitions, related-party transactions, and changes to the business — protecting minority shareholders.
Transfer Restrictions
Includes lock-in periods, right of first refusal (RoFR), right of first offer (RoFO), and restrictions on transfers to competitors or unapproved third parties.
Drag-Along Rights
Allows majority shareholders to require minority shareholders to join a sale of the company on the same terms, facilitating clean exits.
Tag-Along Rights
Allows minority shareholders to participate in a sale by a majority shareholder on the same terms, protecting against being left behind in an exit.
Anti-Dilution Protection
Provides protection for early investors against dilution in future funding rounds through weighted average or full-ratchet anti-dilution mechanisms.
Information & Inspection Rights
Grants shareholders rights to financial information, management accounts, and inspection of books — beyond the minimum required by the Companies Act 2013.
Dividend Policy
Sets out any agreed dividend policy, priority of distribution, and restrictions on declaring dividends without shareholder consent.
Exit Mechanisms
Includes put/call options, IPO obligations, and strategic sale provisions for orderly exit of investors from the Indian company.
Dispute Resolution
Provides for arbitration under the Arbitration and Conciliation Act 1996 and notes recourse to the NCLT under the Companies Act 2013 for oppression and mismanagement.
How to Create a Shareholders Agreement in India
Follow these steps to prepare a comprehensive SHA for your Indian company.
- 1
Align SHA and Articles of Association
Review and align the SHA provisions with the company's AoA. Where key protective provisions (transfer restrictions, pre-emption rights) are in the SHA, reflect them in the AoA to ensure they bind the company itself.
- 2
Define Governance & Reserved Matters
Agree on board composition, quorum, voting thresholds for ordinary and reserved matters, and which decisions require unanimous consent of all shareholders.
- 3
Draft Transfer Restrictions & Exit Rights
Include lock-in periods, RoFR/RoFO mechanisms, drag-along and tag-along provisions, and any pre-agreed exit timelines (such as a mandatory IPO or strategic sale window).
- 4
Execute on Stamp Paper
Execute the SHA on non-judicial stamp paper under the Indian Stamp Act 1899. All shareholders must sign, and authorised signatories of corporate shareholders should produce board resolutions authorising execution.
- 5
File Board Resolutions & Update ROC
If the SHA triggers any changes to the AoA, file the amended AoA with the Registrar of Companies (RoC) under the Companies Act 2013. Maintain a copy of the SHA in the company's registered records.
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Legal Considerations for SHAs in India
These are the key Indian legal points to consider when drafting or entering a Shareholders Agreement.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified Indian advocate or legal practitioner for advice specific to your situation.
Reviewed for Indian law
SHA vs Articles of Association
Under Indian corporate law, the AoA is the constitutional document of the company and binds the company and all shareholders. An SHA, being a private contract, only binds the parties who sign it. Where there is a conflict between the SHA and the AoA, the AoA prevails in relation to the company. To ensure full enforceability of SHA provisions, key terms such as pre-emption rights and transfer restrictions should be mirrored in the AoA.
Companies Act 2013 Mandatory Provisions
The Companies Act 2013 contains mandatory provisions that cannot be contracted out of, including minimum shareholder rights, related-party transaction approval processes under Section 188, and the NCLT's jurisdiction over oppression and mismanagement under Sections 241 and 242. An SHA cannot override these mandatory protections, and provisions that do so may be unenforceable.
NCLT Remedies for Minority Shareholders
Minority shareholders in an Indian company have important statutory protections. Under Sections 241 and 242 of the Companies Act 2013, a minority shareholder can petition the NCLT for relief if the company's affairs are being conducted in a manner oppressive to shareholders or prejudicial to the public interest. The NCLT can order a range of remedies including buy-out of the minority shareholder's stake.
Arbitrability of SHA Disputes
Indian courts have held that many SHA disputes are arbitrable under the Arbitration and Conciliation Act 1996, including disputes relating to share transfer, breach of tag-along/drag-along rights, and information rights. However, disputes that involve the exercise of statutory powers under the Companies Act 2013 (such as NCLT oppression petitions) cannot be referred to arbitration.
Frequently Asked Questions
Protect Your Indian Company with a Strong SHA
Use Doxuno's free Shareholders Agreement template to protect shareholder rights in your Indian private limited company. Customise, stamp, and execute in minutes.
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