| Commentary

100.1 Russell v Northern Bank

| Commentary

(b) Preliminary issues in the drafting of a shareholders’ agreement

100 Provisions which seek to fetter the company’s statutory powers

100.1 Russell v Northern Bank

The most common method of regulating the rights and duties of the shareholders in a private limited company is through the use of a shareholders’ agreement. Under this agreement, the shareholders agree, inter alia, that the affairs of the company will be managed in a certain way, for example that certain decisions will only be made if all the shareholders consent1.

However, this agreement must be drafted with some care. There is no real problem where the shareholders’

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