Shareholders’ Agreement (SHA) 2026: Is it mandatory and key legal considerations

1. What is a Shareholders’ Agreement? Concepts and legal nature

1.1. Concept of a Shareholders’ Agreement (SHA)

A Shareholders’ Agreement (SHA) is a written agreement between the shareholders of a joint-stock company, sometimes involving the company itself as a party. This document prescribes the rights, obligations, governance mechanisms, and cooperative commitments among shareholders during the course of the enterprise’s operations.

Unlike the Articles of Association (Company Charter), a Shareholders’ Agreement is often used to concretize internal matters such as: voting mechanisms, share transfers, protection of minority shareholders, or the resolution of deadlocks in management. Therefore, in corporate governance practice, a Shareholders’ Agreement is considered a vital tool to mitigate disputes among shareholders.

1.2. Legal Regulations related to Shareholders’ Agreements in Vietnam

Vietnamese law does not currently have specific provisions directly governing Shareholders’ Agreements. However, this document is still recognized based on the general provisions of civil law and enterprise law.

According to the Civil Code 2015, a Shareholders’ Agreement is considered a civil contract, established on the principles of freedom of agreement, voluntariness, and non-violation of legal prohibitions.

Furthermore, the Law on Enterprises 2020 (as amended and supplemented in 2025) does not prohibit shareholders from establishing private agreements to regulate internal relations, provided that the contents of the Shareholders’ Agreement do not contradict mandatory legal provisions.

2. Is a Shareholders’ Agreement mandatory under Vietnamese Law?

According to current regulations, a Shareholders’ Agreement is not a mandatory document during the incorporation or operation of a joint-stock company.

In business registration procedures, a company is only required to submit its Articles of Association to the Business Registration Office; it is not mandatory to establish or submit a Shareholders’ Agreement (SHA).

However, in corporate governance practice, a Shareholders’ Agreement is often regarded as an important tool for risk control and establishing a cooperation mechanism among shareholders, especially for startups raising capital or enterprises with multiple shareholder groups.

Therefore, although not legally compulsory, a Shareholders’ Agreement is still viewed by many businesses as an “optional but essential” document in corporate governance.

3. Why should businesses establish a Shareholders’ Agreement?

Although a Shareholders’ Agreement is not a mandatory document by law, in corporate governance practice, it is an important tool that helps shareholders clearly establish their rights, obligations, and cooperation mechanisms. Developing a Shareholders’ Agreement (SHA) from the outset will help the business limit disputes, enhance transparency, and create a stable foundation for the company’s activities.

Although a Shareholders’ Agreement is currently not mandatory, businesses should still establish one because of the benefits it brings, such as:

3.1. Helping to establish commitments between shareholders

Compared to the Articles of Association, a Shareholders’ Agreement allows shareholders to establish more detailed commitments regarding governance and share transfers.

For example, the parties may agree on Tag-along rights to protect minority shareholders when a majority shareholder divests capital, or Drag-along rights to ensure that M&A transactions are carried out smoothly. Additionally, a Shareholders’ Agreement can establish a mechanism for resolving deadlocks in cases where shareholders cannot reach a consensus.

3.2. Helping to protect confidential information and business strategies

A significant advantage of a Shareholders’ Agreement is its confidentiality. Unlike the Articles of Association, which must typically be submitted to the Business Registration Office, a Shareholders’ Agreement is a private document between the parties. Thanks to this, sensitive content such as investment strategies, divestment plans, or share valuation methods can be kept confidential among the shareholders.

3.3. Supporting more effective corporate governance

While the Articles of Association often only prescribe general principles, a Shareholders’ Agreement can concretize decision-making mechanisms within the enterprise.

For instance, shareholders may agree that important decisions such as significant loan applications, asset transfers, or investment expansions must be approved by all founding shareholders. This helps the business control risks and avoid unilateral decisions that affect the collective interest.

3.4. Helping to protect minority Shareholders’ Rights

One of the critical roles of a Shareholders’ Agreement is to protect the interests of minority shareholders. Through provisions on veto rights, preemptive rights to purchase shares, or mechanisms for participation in management, minority shareholders can avoid the risk of being imposed upon by majority shareholders or having their interests in the company diminished.

4. Legal risks when drafting a Shareholders’ Agreement

In practice, the unskillful drafting of a Shareholders’ Agreement (SHA) can give rise to legal risks such as:

– Conflict with the Articles of Association: This is the greatest risk. If the SHA contains provisions contrary to the Articles of Association and the Articles of Association are not amended accordingly, the provisions in the Articles of Association will usually be prioritized for application when a dispute occurs in Court.

– Violation of Free Transferability: The Law on Enterprises stipulates that common shareholders have the right to free transfer. If the SHA prohibits transfers too strictly or indefinitely, such a provision may be declared null and void.

– Impractical Deadlock Resolution Mechanisms: If two parties own 50/50 and the SHA lacks a clear “buy-out” provision, the company could be completely paralyzed when a conflict arises.

5. Advisory and drafting services for Shareholders’ Agreements by Lexconsult & Partners

Developing a Shareholders’ Agreement (SHA) needs to ensure compliance with legal regulations and the corporate governance structure. If not strictly drafted, the agreement may lead to disputes or conflicts with the Articles of Association.

Lexconsult & Partners provides advisory and drafting services for Shareholders’ Agreements, helping businesses establish clear cooperation mechanisms and limit legal risks. Our scope of services includes:

– Reviewing Shareholder Structure: Analyzing the rights and objectives of the shareholders.

– Advising on Essential Provisions: Consulting on critical terms within the Shareholders’ Agreement.

– Drafting the Shareholders’ Agreement: Building an SHA tailored to the business, minimizing potential legal risks.

– Negotiation Support: Assisting parties in reaching a consensus on the agreement’s content.

– Legal Risk Control: Ensuring content complies with legal regulations.

6. FAQ – Frequently Asked Questions regarding Shareholders’ Agreements

If the content of the Shareholders’ Agreement differs from the Articles of Association, which document is prioritized for application?

In cases where the Shareholders’ Agreement has different content than the Articles of Association, the Articles of Association are typically prioritized for application regarding the company and third parties. However, among the shareholders who signed it, the Shareholders’ Agreement (SHA) still holds binding value as a civil contract. To avoid risks, shareholders should amend the Articles of Association to align with the content of the Shareholders’ Agreement.

Is a shareholder who does not sign the Shareholders’ Agreement bound by it?

In principle, a Shareholders’ Agreement only binds the shareholders who participated in the signing. Shareholders who did not sign the agreement will not be bound by its terms. Therefore, when a new shareholder joins the company, the business usually requires them to sign an Adherence Agreement to ensure consistent application.

Can share transfers be restricted in a Shareholders’ Agreement?

The law allows common shareholders to freely transfer shares; however, parties can still agree on certain transfer control mechanisms in the SHA, such as the Right of First Refusal (ROFR), lock-up periods, or tag-along and drag-along rights. These mechanisms help protect shareholder interests and maintain the stability of the ownership structure.

What is the term of a Shareholders’ Agreement?

The term of a Shareholders’ Agreement is agreed upon by the parties. In practice, an SHA usually remains effective until the company is dissolved, only one shareholder remains, or when the enterprise conducts an IPO/listing. During operations, shareholders may also amend or re-sign the agreement if the ownership structure or development strategy of the company changes.

It can be seen that a Shareholders’ Agreement is not a legally mandatory document, but it plays a crucial role in establishing a transparent governance mechanism and limiting disputes among shareholders.

If your business requires consultancy or the drafting of a Shareholders’ Agreement, the corporate legal team at Lexconsult & Partners is ready to assist in developing a document tailored to your shareholder structure and the company’s development goals.

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