A shareholders agreement is used to regulate the ownership and voting rights in the company. This lays out each shareholder’s rights, their obligations and the initial contribution of each shareholder. Should there be any disputes between the shareholders, this agreement sets out how these will be resolved without having to resort to litigation. It forms an integral part of the foundation of a company by protecting its interests and describing how it should be controlled and managed. It is a private document because it deals with the private aspects of the shareholders’ relationship, such as their buy and sell arrangements. However, it should be in line with the company’s memorandum of incorporation in order for it to be valid.