Stockholders Agreement (S-Corporation Form) (DE)

by Practical Law Corporate & Securities

A Standard Document that serves as a stockholders agreement for a for-profit Delaware corporation that has elected to be treated as an S-corporation. This Standard Document is drafted for a scenario with multiple stockholders holding relatively equal ownership percentages. It establishes a framework for corporate governance and stockholder relations, outlining provisions for the management and operation of the company, including the composition of the board of directors and supermajority approval requirements for certain significant corporate actions. This agreement also imposes critical restrictions on the transfer of shares to control ownership and protect the company's S-corporation status under the Internal Revenue Code. Key terms include a right of first refusal (ROFR), specific covenants to maintain the S-corporation election, and confidentiality and non-compete obligations. Furthermore, this Standard Document addresses stockholder information rights and the procedures for a new stockholder to become a party to the agreement.