A dividend shareholders agreement is a legal document that outlines the terms and conditions of the payment of dividends to the shareholders of a company. The agreement is made between the shareholders and the company`s management, and it lays down the rules for the distribution of profits earned by the company among the shareholders.

The purpose of a dividend shareholders agreement is to ensure that all shareholders are treated equally and that everyone`s rights and obligations are clearly defined. The agreement also provides a framework for the company`s management to determine the timing and amount of dividends to be paid, taking into account the financial performance and future growth prospects of the company.

Some of the key provisions included in a dividend shareholders agreement are:

1. Dividend policy: This section outlines the company`s dividend policy, including the frequency, timing, and amount of dividends to be paid. It may also specify any conditions that must be met before dividends are declared.

2. Shareholder rights: The agreement should clearly define the rights of the shareholders with respect to dividend payments, such as the right to receive dividends, the right to vote on dividend policy, and the right to sell or transfer shares.

3. Tax implications: The agreement should address any tax implications of dividend payments, including the requirement to pay taxes on dividends received.

4. Dispute resolution: In the event of a dispute related to dividend payments, the agreement should outline the process for resolving disputes, such as mediation or arbitration.

5. Amendment: The agreement should specify how it can be amended, whether by unanimous consent of the shareholders or a specified majority vote.

In summary, a dividend shareholders agreement is an important document that helps to ensure a fair and transparent process for the payment of dividends to shareholders. It establishes clear guidelines for the company`s management and provides a framework for shareholders to understand their rights and obligations. As such, it is an essential tool for any company that wishes to maintain a strong and positive relationship with its shareholders.