Whether you are starting a new business with friends or arranging new investment into your business it is advisable to properly document the shareholding relationship.

A Shareholder Agreement  creates a contractual relationship between the shareholders of a private limited company. The main advantage of a Shareholder Agreement is that, in addition to enforcing their shareholder rights against the company under its constitution, it allows individual shareholders to enforce their rights under the agreement against each other, providing more protection from the possibility of being squeezed out of the management of the company.

A Shareholder Agreement sets out the basic elements of the shareholders’ relationship with each other and includes the right to first refusal (pre-emption) for the parties should one shareholder wish to sell their shares, helping to prevent outside investors from muscling in on the company. Furthermore, any people to whom shares are transferred must agree to be bound by the terms of the Shareholder Agreement,  as a precondition to the transfer.

I suggest you take the advise from a corporate lawyer before you enter into one but to save costs you can find suitable templates at Simply Docs/Shareholder Agreements