§ 186 Close Corporation Shareholder Agreement Definition

• •A shareholders’ agreement must be a written document.
• •It has to include every shareholder of a close corporation.
• •If the close corporation has only one shareholder, the agreement can be between that shareholder and the corporation, as allowed by Section 300(b).

Two friends own a small, close‑corporation bakery together and they sign a paper that spells out how they will run the business.

Because they are all the shareholders of a close corporation, the signed paper they create is called a shareholders’ agreement under this rule.