Corporate and Governance

A shareholders' agreement is not mandatory by law, but it is essential for any company with more than one partner. The "contrato social" (the company's articles of association, mandatory upon registration) sets out the company's basic structure, but it does not include vesting, tag along, drag along, ROFR, or qualified quorum clauses — those mechanisms belong in the shareholders' agreement, which is a private contract and can be kept confidential. For startups planning to raise investment, the agreement is practically required in practice: Series A investors will review the document before any funding round. In "sociedades limitadas" (Ltdas., the Brazilian equivalent of an LLC) (Civil Code, art. 997 et seq.), the quotaholders' agreement is valid once filed at the company's registered office. In "sociedades anônimas" (S.A.s, the Brazilian equivalent of a corporation), the shareholders' agreement has express legal grounding under art. 118 of Law 6,404/1976 (the Brazilian Corporations Law) and is binding on third parties once recorded in the share registry book.Ler artigo completo

Vesting is the mechanism by which quotas or options are gradually acquired over time — the partner "earns" their stake month by month as they remain with the company and meet the agreed conditions. Cliff is the minimum period of continued involvement before any quota is acquired. The most common model among startups is a 4-year vesting schedule with a 1-year cliff: on the first anniversary, the partner acquires 25% of their stake all at once; over the following 36 months, they acquire the remainder proportionally (1/36 per month). Without a cliff, a co-founder who leaves after two months takes the proportional fraction of the stake corresponding to those two months. With a 1-year cliff, anyone who leaves before completing 12 months acquires no stake at all.Ler artigo completo

Tag along is the co-sale right: when one partner sells their stake to a third party, the other partners have the right to sell under the same conditions and at the same proportional price. It protects a minority founder from being stuck with a new majority partner they did not choose — and without sharing in the gains of the exit. In publicly held "sociedades anônimas" (S.A.s), art. 254-A of Law 6,404/1976 (the Brazilian Corporations Law) guarantees a minimum tag along of 80% of the price paid per share to the controlling shareholder. In "sociedades limitadas" (Ltdas.) and closely held S.A.s, the mechanism must be expressly set out in the shareholders' agreement — the law does not grant it automatically.Ler artigo completo

Four objective triggers call for immediate revision: (1) a new investment round — the entry of an investor via a SAFE, convertible note ("mútuo conversível"), or direct investment creates new rights that the current agreement may not address; (2) the departure or arrival of a partner or key executive — the ownership composition has changed and the agreement should reflect that; (3) approval of an ESOP (Employee Stock Option Plan) — creating an option pool dilutes all partners and creates future corporate obligations that need to be addressed in advance; (4) a material change in the business model or corporate purpose. Beyond these situations, an annual routine review is good practice, especially to check whether the cap table and the agreement still describe the same reality.