{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/13.1-671.1.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/13.1-671.1.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/13.1-671.1.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/13.1-671.1.html"}],"law_id":86810,"edition_id":1,"section_id":86810,"structure_id":12984,"section_number":"13.1-671.1","catch_line":"Shareholder agreements","history":"1990, c. 337; 1997, c. 226; 2005, c. 765; 2015, c. 611; 2019, c. 734.","full_text":"A\n\nAn agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation, even though it is inconsistent with one or more other provisions of this chapter in that it:1\n\nEliminates the board of directors or, subject to the requirements of subsection D of § 13.1-647 and subsection A of § 13.1-693, one or more officers or restricts the discretion or powers of the board of directors;2\n\nGoverns the authorization or making of distributions, regardless of whether they are in proportion to ownership of shares, subject to the limitations in § 13.1-653;3\n\nEstablishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal;4\n\nGoverns, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;5\n\nEstablishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer or employee of the corporation or among any of them;6\n\nTransfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;7\n\nRequires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency; or8\n\nOtherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors and the corporation, or among any of them, and is not contrary to public policy.B\n\nAn agreement authorized by this section shall be:1\n\nAs set forth (i) in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement or (ii) in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation; and2\n\nSubject to amendment only by all persons who are shareholders at the time of the amendment, unless the agreement provides otherwise.C\n\nThe existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by subsection B of § 13.1-648. If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or before the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after the time of purchase of the shares.D\n\nAn agreement authorized by this section shall cease to be effective when the corporation becomes a public corporation. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation’s articles of incorporation or bylaws, adopt an amendment of the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.E\n\nAn agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.F\n\nThe existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.G\n\nIncorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.H\n\nNo action taken pursuant to this section shall change any requirement to file articles or other documents with the Commission or affect the rights of any creditors or other third parties.I\n\nLimits, if any, on the duration of an agreement authorized by this section shall be as set forth in the agreement, except that the duration of an agreement that became effective prior to July 1, 2015, remains 10 years unless the agreement provided otherwise or is subsequently amended to provide otherwise.J\n\nAn agreement among shareholders of a corporation that is consistent with the other provisions of this chapter that does not comply with the provisions of this section shall nonetheless be effective among the shareholders and the corporation.","order_by":null,"text":{"0":{"id":310837,"text":"An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation, even though it is inconsistent with one or more other provisions of this chapter in that it:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":310838,"text":"Eliminates the board of directors or, subject to the requirements of subsection D of § 13.1-647 and subsection A of § 13.1-693, one or more officers or restricts the discretion or powers of the board of directors;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":310839,"text":"Governs the authorization or making of distributions, regardless of whether they are in proportion to ownership of shares, subject to the limitations in § 13.1-653;","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":310840,"text":"Establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal;","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":310841,"text":"Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"A5"},"5":{"id":310842,"text":"Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer or employee of the corporation or among any of them;","type":"section","prefixes":["A","5"],"prefix":"5","entire_prefix":"A5","prefix_anchor":"A5","level":2,"prior_prefix":"A4","next_prefix":"A6"},"6":{"id":310843,"text":"Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;","type":"section","prefixes":["A","6"],"prefix":"6","entire_prefix":"A6","prefix_anchor":"A6","level":2,"prior_prefix":"A5","next_prefix":"A7"},"7":{"id":310844,"text":"Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency; or","type":"section","prefixes":["A","7"],"prefix":"7","entire_prefix":"A7","prefix_anchor":"A7","level":2,"prior_prefix":"A6","next_prefix":"A8"},"8":{"id":310845,"text":"Otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors and the corporation, or among any of them, and is not contrary to public policy.","type":"section","prefixes":["A","8"],"prefix":"8","entire_prefix":"A8","prefix_anchor":"A8","level":2,"prior_prefix":"A7","next_prefix":"B"},"9":{"id":310846,"text":"An agreement authorized by this section shall be:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A8","next_prefix":"B1"},"10":{"id":310847,"text":"As set forth (i) in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement or (ii) in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation; and","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"11":{"id":310848,"text":"Subject to amendment only by all persons who are shareholders at the time of the amendment, unless the agreement provides otherwise.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"12":{"id":310849,"text":"The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by subsection B of § 13.1-648. If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or before the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of 90 days after discovery of the existence of the agreement or two years after the time of purchase of the shares.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2","next_prefix":"D"},"13":{"id":310850,"text":"An agreement authorized by this section shall cease to be effective when the corporation becomes a public corporation. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation’s articles of incorporation or bylaws, adopt an amendment of the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"14":{"id":310851,"text":"An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"15":{"id":310852,"text":"The existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"16":{"id":310853,"text":"Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"17":{"id":310854,"text":"No action taken pursuant to this section shall change any requirement to file articles or other documents with the Commission or affect the rights of any creditors or other third parties.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"18":{"id":310855,"text":"Limits, if any, on the duration of an agreement authorized by this section shall be as set forth in the agreement, except that the duration of an agreement that became effective prior to July 1, 2015, remains 10 years unless the agreement provided otherwise or is subsequently amended to provide otherwise.","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"J"},"19":{"id":310856,"text":"An agreement among shareholders of a corporation that is consistent with the other provisions of this chapter that does not comply with the provisions of this section shall nonetheless be effective among the shareholders and the corporation.","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I"}},"ancestry":[{"id":12984,"edition_id":1,"name":"Shareholders","identifier":"8","label":"article","depth":3,"order_by":1,"parent_id":12983,"metadata":{},"date_created":"2026-06-26 03:44:06","date_modified":"2026-06-26 03:44:06","permalink":{"id":151041,"object_type":"structure","relational_id":12984,"identifier":"8","token":"13.1\/9\/8","url":"\/13.1\/9\/8\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12983,"edition_id":1,"name":"Virginia Stock Corporation Act","identifier":"9","label":"chapter","depth":2,"order_by":1,"parent_id":12744,"metadata":{},"date_created":"2026-06-26 03:44:06","date_modified":"2026-06-26 03:44:06","permalink":{"id":150163,"object_type":"structure","relational_id":12983,"identifier":"9","token":"13.1\/9","url":"\/13.1\/9\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12744,"edition_id":1,"name":"Corporations","identifier":"13.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":147493,"object_type":"structure","relational_id":12744,"identifier":"13.1","token":"13.1","url":"\/13.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":81471,"structure_id":12984,"section_number":"13.1-654","catch_line":"Annual meeting","url":"\/13.1-654\/","token":"13.1\/9\/8\/13.1-654","metadata":false},{"id":73174,"structure_id":12984,"section_number":"13.1-655","catch_line":"Special 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the meeting","url":"\/13.1-660.1\/","token":"13.1\/9\/8\/13.1-660.1","metadata":false},{"id":66418,"structure_id":12984,"section_number":"13.1-660.2","catch_line":"Remote participation in shareholders' meetings","url":"\/13.1-660.2\/","token":"13.1\/9\/8\/13.1-660.2","metadata":false},{"id":68550,"structure_id":12984,"section_number":"13.1-661","catch_line":"Shareholders' list for meeting","url":"\/13.1-661\/","token":"13.1\/9\/8\/13.1-661","metadata":false},{"id":69361,"structure_id":12984,"section_number":"13.1-662","catch_line":"Voting entitlement of shares","url":"\/13.1-662\/","token":"13.1\/9\/8\/13.1-662","metadata":false},{"id":64506,"structure_id":12984,"section_number":"13.1-663","catch_line":"Proxies","url":"\/13.1-663\/","token":"13.1\/9\/8\/13.1-663","metadata":false},{"id":54067,"structure_id":12984,"section_number":"13.1-664","catch_line":"Shares held by intermediaries and nominees","url":"\/13.1-664\/","token":"13.1\/9\/8\/13.1-664","metadata":false},{"id":54603,"structure_id":12984,"section_number":"13.1-664.1","catch_line":"Inspectors of election","url":"\/13.1-664.1\/","token":"13.1\/9\/8\/13.1-664.1","metadata":false},{"id":83777,"structure_id":12984,"section_number":"13.1-665","catch_line":"Corporation's acceptance of votes","url":"\/13.1-665\/","token":"13.1\/9\/8\/13.1-665","metadata":false},{"id":84488,"structure_id":12984,"section_number":"13.1-666","catch_line":"Quorum and voting requirements for voting groups","url":"\/13.1-666\/","token":"13.1\/9\/8\/13.1-666","metadata":false},{"id":79680,"structure_id":12984,"section_number":"13.1-667","catch_line":"Action by single and multiple voting groups","url":"\/13.1-667\/","token":"13.1\/9\/8\/13.1-667","metadata":false},{"id":77041,"structure_id":12984,"section_number":"13.1-668","catch_line":"Modifying quorum or voting requirements","url":"\/13.1-668\/","token":"13.1\/9\/8\/13.1-668","metadata":false},{"id":78535,"structure_id":12984,"section_number":"13.1-669","catch_line":"Voting for directors; cumulative voting","url":"\/13.1-669\/","token":"13.1\/9\/8\/13.1-669","metadata":false},{"id":63708,"structure_id":12984,"section_number":"13.1-669.1","catch_line":"Judicial determination of corporate offices and review of elections and shareholder votes","url":"\/13.1-669.1\/","token":"13.1\/9\/8\/13.1-669.1","metadata":false},{"id":86769,"structure_id":12984,"section_number":"13.1-670","catch_line":"Voting trusts","url":"\/13.1-670\/","token":"13.1\/9\/8\/13.1-670","metadata":false},{"id":62883,"structure_id":12984,"section_number":"13.1-671","catch_line":"Voting agreements","url":"\/13.1-671\/","token":"13.1\/9\/8\/13.1-671","metadata":false},{"id":86810,"structure_id":12984,"section_number":"13.1-671.1","catch_line":"Shareholder agreements","url":"\/13.1-671.1\/","token":"13.1\/9\/8\/13.1-671.1","metadata":false},{"id":66593,"structure_id":12984,"section_number":"13.1-672","catch_line":"Repealed","url":"\/13.1-672\/","token":"13.1\/9\/8\/13.1-672","metadata":false}],"previous_section":{"id":62883,"structure_id":12984,"section_number":"13.1-671","catch_line":"Voting agreements","url":"\/13.1-671\/","token":"13.1\/9\/8\/13.1-671","metadata":false},"next_section":{"id":66593,"structure_id":12984,"section_number":"13.1-672","catch_line":"Repealed","url":"\/13.1-672\/","token":"13.1\/9\/8\/13.1-672","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/13.1-671.1\/","history_text":"

This law was first created in 1990. The record of its establishment is cataloged in chapter 337 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1990 \u201cActs\u201d aren\u2019t available online. It has been modified 4 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1997, chapter 226<\/a>; in 2005, chapter 765<\/a>; in 2015, chapter 611<\/a>; in 2019, chapter 734<\/a>.<\/p>","references":[{"id":72408,"section_number":"13.1-553","catch_line":"Board of directors","order_by":null,"url":"\/13.1-553\/"},{"id":79378,"section_number":"13.1-673","catch_line":"Requirement for and duties of board of directors","order_by":null,"url":"\/13.1-673\/"},{"id":57551,"section_number":"13.1-688","catch_line":"Quorum and voting by directors","order_by":null,"url":"\/13.1-688\/"},{"id":75621,"section_number":"13.1-693","catch_line":"Required officers","order_by":null,"url":"\/13.1-693\/"},{"id":69231,"section_number":"13.1-719.1","catch_line":"Formation of a holding company","order_by":null,"url":"\/13.1-719.1\/"}],"refers_to":[{"id":73099,"section_number":"13.1-647","catch_line":"Form and content of certificates evidencing shares","order_by":null,"url":"\/13.1-647\/"},{"id":70031,"section_number":"13.1-648","catch_line":"Shares without certificates","order_by":null,"url":"\/13.1-648\/"},{"id":80786,"section_number":"13.1-653","catch_line":"Distributions to shareholders","order_by":null,"url":"\/13.1-653\/"},{"id":75621,"section_number":"13.1-693","catch_line":"Required officers","order_by":null,"url":"\/13.1-693\/"}],"permalink":{"id":151131,"object_type":"law","relational_id":86810,"identifier":"13.1-671.1","token":"13.1\/9\/8\/13.1-671.1","url":"\/13.1-671.1\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/13.1-671.1\/","token":"13.1\/9\/8\/13.1-671.1","dublin_core":{"Title":"Shareholder agreements","Type":"Text","Format":"text\/html","Identifier":"\u00a7 13.1-671.1","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> An agreement among the shareholders<\/span> of a corporation<\/span> that complies with this section is effective among the shareholders<\/span> and the corporation<\/span>, even though it is inconsistent with one or more other provisions of this chapter in that it: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Eliminates the board of directors or, subject to the requirements of subsection D of § 13.1-647<\/a> and subsection A of § 13.1-693<\/a>, one or more officers or restricts the discretion or powers of the board of directors; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Governs the authorization or making of distributions<\/span>, regardless of whether they are in proportion to ownership of shares<\/span>, subject to the limitations in § 13.1-653<\/a>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Establishes who shall be directors or officers of the corporation<\/span>, or their terms of office or manner of selection or removal; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Governs, in general or in regard to specific matters, the exercise or division of voting power<\/span> by or between the shareholders<\/span> and directors or by or among any of them, including use of weighted voting rights or director proxies; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation<\/span> and any shareholder<\/span>, director, officer or employee of the corporation<\/span> or among any of them; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Transfers to one or more shareholders<\/span> or other persons<\/span> all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation<\/span>, including the resolution of any issue<\/span> about which there exists a deadlock among directors or shareholders<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> Requires dissolution of the corporation<\/span> at the request of one or more of the shareholders<\/span> or upon the occurrence of a specified event or contingency; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> Otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation<\/span> or the relationship among the shareholders<\/span>, the directors and the corporation<\/span>, or among any of them, and is not contrary to public policy. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> An agreement authorized by this section shall be: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> As set forth (i) in the articles of incorporation<\/span> or bylaws and approved by all persons<\/span> who are shareholders<\/span> at the time of the agreement or (ii) in a written<\/span> agreement that is signed by all persons<\/span> who are shareholders<\/span> at the time of the agreement and is made known to the corporation<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Subject to amendment only by all persons<\/span> who are shareholders<\/span> at the time of the amendment, unless the agreement provides otherwise. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares<\/span> or on the information statement required by subsection B of § 13.1-648<\/a>. If at the time of the agreement the corporation<\/span> has shares<\/span> outstanding represented by certificates, the corporation<\/span> shall recall the outstanding certificates and issue<\/span> substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares<\/span> who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares<\/span> in compliance with this subsection and, if the shares<\/span> are not represented by a certificate, the information statement is delivered to the purchaser at or before the time of purchase of the shares<\/span>. An action to enforce the right of rescission authorized by this subsection must be commenced within the earlier of 90 days after discovery<\/span> of the existence of the agreement or two years after the time of purchase of the shares<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> An agreement authorized by this section shall cease to be effective when the corporation becomes a public corporation<\/span>. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation’s articles of incorporation<\/span> or bylaws, adopt an amendment of the articles of incorporation<\/span> or bylaws, without shareholder<\/span> action, to delete the agreement and any references to it. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person<\/span> or persons<\/span> in whom such discretion or powers are vested, liability for acts or omissions imposed by law<\/span> on directors to the extent that the discretion or powers of the directors are limited by the agreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> The existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any shareholder<\/span> for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> Incorporators or subscribers<\/span> for shares<\/span> may act as shareholders<\/span> with respect to an agreement authorized by this section if no shares<\/span> have been issued when the agreement is made. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> No action taken pursuant to this section shall change any requirement to file articles or other documents<\/span> with the Commission<\/span> or affect the rights of any creditors<\/span> or other third parties. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> Limits, if any, on the duration of an agreement authorized by this section shall be as set forth in the agreement, except that the duration of an agreement that became effective prior to July 1, 2015, remains 10 years unless the agreement provided otherwise or is subsequently amended to provide otherwise. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

J.<\/span> An agreement among shareholders<\/span> of a corporation that is consistent with the other provisions of this chapter that does not comply with the provisions of this section shall nonetheless be effective among the shareholders<\/span> and the corporation. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nSHAREHOLDER AGREEMENTS (\u00a7 13.1-671.1)\n\nA. An agreement among the shareholders of a corporation that complies with this\nsection is effective among the shareholders and the corporation, even though it\nis inconsistent with one or more other provisions of this chapter in that it:\n\n 1. Eliminates the board of directors or, subject to the requirements of\n subsection D of § 13.1-647 and subsection A of § 13.1-693, one or\n more officers or restricts the discretion or powers of the board of directors;\n\n 2. Governs the authorization or making of distributions, regardless of whether\n they are in proportion to ownership of shares, subject to the limitations in\n § 13.1-653;\n\n 3. Establishes who shall be directors or officers of the corporation, or their\n terms of office or manner of selection or removal;\n\n 4. Governs, in general or in regard to specific matters, the exercise or\n division of voting power by or between the shareholders and directors or by or\n among any of them, including use of weighted voting rights or director\n proxies;\n\n 5. Establishes the terms and conditions of any agreement for the transfer or\n use of property or the provision of services between the corporation and any\n shareholder, director, officer or employee of the corporation or among any of\n them;\n\n 6. Transfers to one or more shareholders or other persons all or part of the\n authority to exercise the corporate powers or to manage the business and\n affairs of the corporation, including the resolution of any issue about which\n there exists a deadlock among directors or shareholders;\n\n 7. Requires dissolution of the corporation at the request of one or more of\n the shareholders or upon the occurrence of a specified event or contingency;\n or\n\n 8. Otherwise governs the exercise of the corporate powers or the management of\n the business and affairs of the corporation or the relationship among the\n shareholders, the directors and the corporation, or among any of them, and is\n not contrary to public policy.\n\nB. An agreement authorized by this section shall be:\n\n 1. As set forth (i) in the articles of incorporation or bylaws and approved by\n all persons who are shareholders at the time of the agreement or (ii) in a\n written agreement that is signed by all persons who are shareholders at the\n time of the agreement and is made known to the corporation; and\n\n 2. Subject to amendment only by all persons who are shareholders at the time\n of the amendment, unless the agreement provides otherwise.\n\nC. The existence of an agreement authorized by this section shall be noted\nconspicuously on the front or back of each certificate for outstanding shares or\non the information statement required by subsection B of § 13.1-648. If at\nthe time of the agreement the corporation has shares outstanding represented by\ncertificates, the corporation shall recall the outstanding certificates and\nissue substitute certificates that comply with this subsection. The failure to\nnote the existence of the agreement on the certificate or information statement\nshall not affect the validity of the agreement or any action taken pursuant to\nit. Any purchaser of shares who, at the time of purchase, did not have knowledge\nof the existence of the agreement shall be entitled to rescission of the\npurchase. A purchaser shall be deemed to have knowledge of the existence of the\nagreement if its existence is noted on the certificate or information statement\nfor the shares in compliance with this subsection and, if the shares are not\nrepresented by a certificate, the information statement is delivered to the\npurchaser at or before the time of purchase of the shares. An action to enforce\nthe right of rescission authorized by this subsection must be commenced within\nthe earlier of 90 days after discovery of the existence of the agreement or two\nyears after the time of purchase of the shares.\n\nD. An agreement authorized by this section shall cease to be effective when the\ncorporation becomes a public corporation. If the agreement ceases to be\neffective for any reason, the board of directors may, if the agreement is\ncontained or referred to in the corporation’s articles of incorporation or\nbylaws, adopt an amendment of the articles of incorporation or bylaws, without\nshareholder action, to delete the agreement and any references to it.\n\nE. An agreement authorized by this section that limits the discretion or powers\nof the board of directors shall relieve the directors of, and impose upon the\nperson or persons in whom such discretion or powers are vested, liability for\nacts or omissions imposed by law on directors to the extent that the discretion\nor powers of the directors are limited by the agreement.\n\nF. The existence or performance of an agreement authorized by this section shall\nnot be a ground for imposing personal liability on any shareholder for the acts\nor debts of the corporation even if the agreement or its performance treats the\ncorporation as if it were a partnership or results in failure to observe the\ncorporate formalities otherwise applicable to the matters governed by the\nagreement.\n\nG. Incorporators or subscribers for shares may act as shareholders with respect\nto an agreement authorized by this section if no shares have been issued when\nthe agreement is made.\n\nH. No action taken pursuant to this section shall change any requirement to file\narticles or other documents with the Commission or affect the rights of any\ncreditors or other third parties.\n\nI. Limits, if any, on the duration of an agreement authorized by this section\nshall be as set forth in the agreement, except that the duration of an agreement\nthat became effective prior to July 1, 2015, remains 10 years unless the\nagreement provided otherwise or is subsequently amended to provide otherwise.\n\nJ. An agreement among shareholders of a corporation that is consistent with the\nother provisions of this chapter that does not comply with the provisions of\nthis section shall nonetheless be effective among the shareholders and the\ncorporation.\n\nHISTORY: 1990, c. 337; 1997, c. 226; 2005, c. 765; 2015, c. 611; 2019, c. 734.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}