# What is shareholders' agreement?

Source: https://launch-rec.com/glossary/shareholders-agreement. Category: Ownership. Market: US and UK.

## Definition

The contract between owners setting out control, decision rights, share transfers and what happens when someone leaves or the business is sold.

## In practice

Reserved matters decide which choices need investor consent — usually borrowing, hiring above a threshold, and changing the business plan.

Leaver clauses are where founders get hurt. Understand good-leaver and bad-leaver definitions before signing, not during a dispute.

## Related terms

- https://launch-rec.com/glossary/equity-stake
- https://launch-rec.com/glossary/vesting
- https://launch-rec.com/glossary/earn-out