Starting a business with a trusted friend, colleague, developer or investor may seem straightforward at the beginning. The founders agree on a business idea, decide how the shares will be divided and begin developing the product. During the early stages, discussions about future disagreements, founder departures, share transfers or company control may appear unnecessary or even pessimistic.

However, many of the most serious legal problems experienced by startups do not arise from customers or competitors. They arise between the founders themselves.

What happens if one founder stops working after six months but continues to own 50% of the company? What happens if the founders disagree about accepting an investor? Can one shareholder sell shares to a competitor? Who owns the software developed before incorporation? Can a majority shareholder sell the entire company without the minority shareholder’s consent? What happens if additional investment is required but one founder refuses to contribute capital?

These questions demonstrate why a shareholders’ agreement for a startup in Turkey should be considered an essential part of the company’s legal infrastructure.

A shareholders’ agreement, commonly referred to as an SHA, is a private agreement between shareholders regulating their rights, obligations and relationships concerning the company. Turkish legislation does not specifically create a statutory contract called a shareholders’ agreement. Nevertheless, such agreements are generally structured within the principle of freedom of contract under the Turkish Code of Obligations, subject to mandatory provisions of Turkish company law and other applicable legislation.

For startups in particular, the importance of a shareholders’ agreement is significantly greater because startups experience rapid changes in ownership, financing, management and valuation.

This article explains why startup founders should sign a shareholders’ agreement in Turkey, what provisions should normally be included, how founder disputes can be prevented and why the articles of association alone may not provide sufficient protection.

What Is a Shareholders’ Agreement?

A shareholders’ agreement is a contract concluded between some or all shareholders of a company to regulate their relationship with each other and, indirectly, their approach to the management and future of the company.

The agreement may address matters including:

• ownership percentages,
• founder responsibilities,
• voting arrangements,
• management authority,
• appointment of directors,
• reserved matters,
• future investment rounds,
• share transfers,
• pre-emption rights,
• right of first refusal,
• founder vesting,
• good leaver and bad leaver provisions,
• non-compete obligations,
• confidentiality,
• intellectual property ownership,
• dividend policy,
• financing obligations,
• deadlock procedures,
• tag-along rights,
• drag-along rights,
• put and call options,
• company sale procedures,
• and dispute resolution.

The exact content should depend on the startup’s structure.

A shareholders’ agreement prepared for two software developers establishing a bootstrapped SaaS company should not necessarily be identical to an agreement prepared for a startup that has received a EUR 2 million venture capital investment.

The purpose is not to use the longest possible agreement.

The purpose is to identify the risks associated with the specific shareholder relationship and establish rules before those risks turn into disputes.

Why Are Verbal Agreements Between Startup Founders Dangerous?

Startup founders frequently begin their business relationship informally.

One founder may say:

“You will handle the software, I will handle sales, and we will split everything 50/50.”

At that moment, both founders may completely trust each other.

Three years later, circumstances may be very different.

One founder may have worked twelve hours per day while the other gradually stopped participating.

The company may now be worth several million euros.

An investor may want to purchase 20% of the company.

One founder may want to sell while the other refuses.

The original verbal understanding may provide little assistance in resolving these disputes.

For this reason, founder relationships should be documented when the founders are still aligned.

Negotiating rules when everybody wants the startup to succeed is generally much easier than attempting to negotiate those same rules after a conflict has occurred.

Is a Shareholders’ Agreement the Same as the Articles of Association?

No.

This distinction is extremely important under Turkish law.

The articles of association constitute the company’s fundamental constitutional document and operate within the corporate framework established by the Turkish Commercial Code.

A shareholders’ agreement, by contrast, is fundamentally contractual.

It primarily creates obligations between the parties who sign it.

Therefore, a provision appearing only in a shareholders’ agreement does not automatically produce the same corporate effect as a valid provision contained in the articles of association.

Turkish legal practice therefore requires careful coordination between the shareholders’ agreement and the company’s articles of association. Certain arrangements may need to be reflected in the constitutional documents or implemented through appropriate corporate resolutions if the parties want them to produce effective consequences at company level.

This is particularly important for startups using international investment templates.

A clause that works perfectly in a Delaware, English or Dutch shareholders’ agreement cannot automatically be assumed to produce identical results in a Turkish company.

The agreement must be adapted to Turkish law.

Why Is a Standard Articles of Association Usually Insufficient for a Startup?

A standard incorporation document generally regulates basic corporate matters.

A startup relationship, however, involves much more complicated commercial questions.

For example:

Founder A owns 50%.

Founder B owns 50%.

The articles of association may clearly show this ownership structure.

But they may not adequately answer the following questions:

What if Founder A stops working?

What if Founder B wants to sell shares?

Who decides whether a new investor enters?

Can Founder A create a competing startup?

What happens to shares if one founder dies?

What happens if a founder becomes permanently unable to work?

Who owns the software originally written by the founders?

What happens if the founders cannot agree on the annual budget?

Can one founder block a company sale?

Can a shareholder transfer shares to a competitor?

These are precisely the types of issues that should be addressed through a properly drafted founders’ or shareholders’ agreement.

1. A Shareholders’ Agreement Defines the Roles of the Founders

One of the first matters that should be clarified is founder responsibility.

Startups frequently divide equity without defining operational responsibilities.

For example:

Founder A owns 40% and is responsible for technology.

Founder B owns 40% and is responsible for business development.

Founder C owns 20% and is responsible for marketing.

The shareholders’ agreement can define what each founder is expected to contribute.

Depending on the circumstances, it may regulate:

• minimum time commitment,
• management responsibilities,
• business development obligations,
• technical responsibilities,
• fundraising responsibilities,
• reporting obligations,
• and restrictions on outside business activities.

This becomes particularly important where the shareholding percentages were allocated partly because each founder promised to contribute future work.

Equity should not automatically become compensation for work that is never performed.

2. Founder Vesting Can Prevent the “Free Rider” Problem

One of the most serious startup problems occurs when a founder leaves early but retains a substantial percentage of the company.

Suppose four founders each receive 25%.

After four months, one founder leaves permanently.

The remaining three founders continue developing the company for five years.

The former founder still owns 25%.

When investors conduct due diligence, they discover that one quarter of the company belongs to a person who has contributed almost nothing since the first year.

This is commonly described as “dead equity”.

It can seriously damage fundraising prospects.

Vesting mechanisms are intended to address this problem.

Under a typical vesting arrangement, a founder’s economic entitlement to the originally contemplated equity develops gradually over time.

For example, the parties may commercially structure a four-year vesting period with a one-year cliff.

If the founder leaves very early, contractual mechanisms may affect the treatment of that founder’s shares.

If the founder remains for the agreed period, the founder receives the full intended economic benefit.

However, vesting mechanisms used in international startup agreements must be carefully adapted to Turkish corporate law. The legal mechanics cannot always be imported word-for-word from foreign templates.

3. Good Leaver and Bad Leaver Provisions Protect the Startup

Not every founder departure should produce the same result.

Imagine two situations.

In the first scenario, a founder becomes seriously unable to continue participating for reasons outside his or her control.

In the second scenario, a founder deliberately transfers confidential company data to a competitor and establishes a competing business.

Treating both founders identically would generally be commercially unreasonable.

This is why startup shareholders’ agreements often distinguish between a good leaver and a bad leaver.

A good leaver may include a founder leaving because of circumstances considered legitimate under the agreement.

A bad leaver may include circumstances such as:

• serious breach of contract,
• fraud,
• intentional damage to the company,
• serious confidentiality violation,
• unauthorised competition,
• or abandonment of agreed responsibilities.

The agreement can determine what contractual consequences follow in each case, subject to the limits of mandatory Turkish law.

4. A Shareholders’ Agreement Determines How Important Decisions Are Made

Share ownership and management power are not always the same thing.

A shareholder owning 60% of a startup may have majority control.

However, the minority investor holding 40% may have invested most of the company’s cash.

The investor may therefore require approval rights concerning certain critical decisions.

These matters are often called reserved matters.

Examples may include:

• increasing company capital,
• issuing new shares,
• taking significant loans,
• changing the company’s main business activity,
• selling important intellectual property,
• acquiring another company,
• selling significant company assets,
• appointing senior management,
• approving large transactions,
• entering related-party transactions,
• creating security over company assets,
• changing dividend policy,
• or selling the company.

The shareholders’ agreement can establish specific approval thresholds for these decisions.

However, those contractual arrangements must remain consistent with mandatory corporate rules and should be coordinated with the company’s constitutional documents where necessary.

5. It Can Prevent One Founder From Controlling Everything

Consider a startup in which Founder A owns 51% and Founder B owns 49%.

Without additional protections, Founder A may have significantly greater influence over ordinary shareholder decisions.

Founder B may therefore want protection against major structural decisions being taken unilaterally.

The shareholders’ agreement can provide that specified matters require:

• unanimous approval,
• a qualified majority,
• or the affirmative vote of a specified shareholder or investor.

This can create an appropriate balance between majority control and minority protection.

However, excessive veto rights can also create problems.

If every minor business decision requires unanimous approval, the startup may become impossible to manage.

A good shareholders’ agreement should therefore protect minority interests without paralysing ordinary business operations.

6. Deadlock Provisions Can Save a 50/50 Startup

A 50/50 shareholding structure may appear fair.

It can also become one of the most dangerous structures when disagreements arise.

Suppose Founder A owns 50%.

Founder B owns 50%.

Founder A wants to raise investment.

Founder B refuses.

Founder A wants to appoint a new CEO.

Founder B refuses.

Founder B wants to expand internationally.

Founder A refuses.

Neither founder can obtain the necessary support.

The company enters a deadlock.

Without a contractual solution, this dispute can continue for months or years.

A shareholders’ agreement may establish a deadlock procedure.

Depending on the circumstances, this could include:

1. negotiation between the founders,
2. escalation to designated senior representatives,
3. mediation,
4. independent expert determination for technical issues,
5. buy-sell procedures,
6. put or call arrangements,
7. or another agreed exit mechanism.

Deadlock clauses must be drafted carefully because an aggressive buy-sell mechanism may unfairly favour the shareholder with greater financial resources.

7. Share Transfer Restrictions Protect the Founder Group

A startup founder should not necessarily be able to sell shares freely to anyone.

Imagine that three founders establish a cybersecurity company.

One founder later wants to sell shares to the startup’s biggest competitor.

The remaining founders would probably want the ability to prevent or control such a transaction.

For this reason, shareholders’ agreements commonly contain share transfer restrictions.

These may include:

• lock-up periods,
• permitted transfer rules,
• rights of first refusal,
• pre-emption rights,
• board or shareholder approval mechanisms where legally permissible,
• restrictions on transfers to competitors,
• and procedures governing transfers to affiliates or family members.

For Turkish companies, these provisions must be structured consistently with the applicable share transfer provisions of the Turkish Commercial Code. In particular, different statutory regimes apply to share transfers in joint stock companies and limited liability companies.

8. Right of First Refusal Can Keep Shares Within the Existing Group

A right of first refusal, commonly abbreviated as ROFR, can provide existing shareholders with an opportunity to acquire shares before they are transferred to a third party.

For example:

Founder A receives an offer from an outside investor to purchase 20% of the company.

Under a properly drafted ROFR mechanism, Founder A may first be required to offer the shares to the existing shareholders on the relevant contractual terms.

This mechanism may help preserve the agreed ownership balance.

It also prevents shareholders from discovering only after the transaction that a completely unknown third party has become their new business partner.

9. Tag-Along Rights Protect Minority Shareholders

A tag-along right is particularly important for minority shareholders.

Suppose:

Founder A owns 70%.

Founder B owns 30%.

A large technology company offers to purchase Founder A’s 70%.

Without contractual protection, Founder B might remain as a 30% minority shareholder under a completely new controlling owner.

A tag-along clause can provide Founder B with the right, subject to the contractual conditions, to participate in the sale and sell shares on equivalent or defined terms.

This protects the minority shareholder from being left behind when control changes.

10. Drag-Along Rights Can Facilitate an Exit

The opposite problem can also occur.

Suppose a buyer wants to acquire 100% of a startup.

The founders collectively own 85%.

An early investor owns 15%.

The founders want to sell.

The investor refuses.

The buyer states:

“We only purchase 100% of the company.”

The entire transaction may collapse because of one minority shareholder.

A properly structured drag-along mechanism can address this type of scenario by creating contractual obligations enabling qualifying shareholders to require other shareholders to participate in a sale when specified conditions are satisfied.

Drag-along provisions are extremely important for startups because the possibility of a future exit is frequently central to both founder and investor expectations.

However, contractual drag-along mechanisms must be analysed together with mandatory Turkish share transfer rules and the structure of the relevant company.

11. The Agreement Can Regulate Future Investment Rounds

Most successful startups require additional financing.

When new investment enters the company, existing shareholders may be diluted.

For example:

Two founders initially own 50% each.

A seed investor later receives 20%.

After the transaction, the founders’ percentages decrease.

A Series A round may dilute them again.

Another round may further change ownership.

These changes are normal in startup financing.

The legal problem arises when the founders never agreed on how investment decisions would be made.

A shareholders’ agreement can address:

• who may negotiate with investors,
• what approvals are required,
• whether existing shareholders have participation rights,
• how new share issues are approved,
• whether shareholders must participate in future financing,
• what happens if a shareholder refuses,
• and what investor rights may be granted.

12. Anti-Dilution Provisions May Protect Investors

Professional investors may request anti-dilution protection.

Suppose an investor purchases shares based on a EUR 5 million startup valuation.

One year later, the company urgently needs cash and conducts another investment round at a significantly lower valuation.

This may be called a down round.

Depending on the investment structure, the investor may seek protection against the economic consequences of this lower valuation.

Anti-dilution clauses can therefore become an important negotiation point.

However, founders should not automatically accept any anti-dilution language presented by an investor.

Different formulas can produce dramatically different economic results.

A poorly negotiated provision may substantially reduce founders’ economic participation in future rounds.

Legal and financial modelling should therefore be performed before accepting sophisticated dilution mechanisms.

13. Intellectual Property Ownership Should Be Clearly Regulated

For many startups, intellectual property is the company’s most valuable asset.

This may include:

• source code,
• algorithms,
• artificial intelligence models,
• mobile applications,
• trademarks,
• domain names,
• software architecture,
• product designs,
• databases,
• patents,
• business methods,
• confidential information,
• and trade secrets.

A serious problem arises if these assets remain personally owned by one founder.

Suppose Founder A develops the original software before incorporation.

The company is later established by three founders.

No intellectual property assignment is executed.

Founder A leaves two years later and argues that the software still belongs personally to him.

The entire startup may face an existential legal problem.

The shareholders’ agreement and related intellectual property documents should clearly establish what IP belongs to the company and what founders must transfer or license.

Investors will frequently examine this issue during legal due diligence.

Unclear IP ownership can delay or even prevent an investment transaction.

14. Confidentiality Obligations Protect Sensitive Startup Information

Startup founders have access to highly sensitive information.

This can include:

• product roadmaps,
• algorithms,
• pricing policies,
• investor negotiations,
• customer information,
• commercial strategies,
• supplier arrangements,
• financial data,
• and unpublished technologies.

A shareholder leaving the company should not automatically be free to disclose this information.

A shareholders’ agreement can therefore contain detailed confidentiality obligations.

These provisions may continue after the shareholder ceases to participate in the company.

Confidentiality clauses should also be coordinated with employment contracts, consultancy agreements, intellectual property agreements and data protection obligations.

15. Non-Compete Restrictions May Be Important

Founders may also want to prevent a departing shareholder from immediately establishing a directly competing business using the knowledge obtained through the startup.

For example, three founders spend four years developing a specialised logistics platform.

One founder leaves and immediately launches an almost identical product targeting exactly the same customers.

The commercial consequences may be significant.

A shareholders’ agreement may therefore include competition restrictions.

However, non-compete obligations are not unlimited.

Their scope, duration, geography, subject matter and relationship with the legitimate interests being protected should be carefully assessed under applicable Turkish law.

An excessively broad restriction may create enforceability problems.

For this reason, non-compete provisions should not simply be copied from foreign startup templates.

16. The Agreement Can Regulate Founder Salaries and Benefits

Another common source of conflict is money.

At the beginning, founders may agree not to take salaries.

Once the startup begins generating revenue, the situation changes.

One founder may want a substantial salary.

Another may prefer to reinvest all cash into growth.

A third founder may claim reimbursement for personal expenses.

The shareholders’ agreement can establish principles regarding:

• founder salaries,
• bonuses,
• expense reimbursement,
• company vehicles,
• consulting payments,
• related-party transactions,
• and other financial benefits.

This helps prevent majority shareholders or managers from extracting disproportionate economic value outside formal dividend distributions.

17. Dividend Policy Can Be Agreed in Advance

Startups often reinvest profits rather than distribute dividends.

However, shareholders may have different financial objectives.

A founder may want to continue growing the business.

An investor may eventually expect distributions.

Another shareholder may urgently need liquidity.

The agreement can establish a framework governing dividend policy while preserving the powers and mandatory rules applicable to the company’s competent corporate bodies.

This reduces uncertainty regarding how profits are expected to be used.

18. A Shareholders’ Agreement Can Protect Minority Investors

Minority investors often invest substantial amounts of capital without obtaining majority control.

For example, an investor may provide EUR 1 million for 20% of a startup.

The founders retain 80%.

The investor will typically want certain protections.

These may include:

• information rights,
• financial reporting,
• inspection rights,
• reserved matter vetoes,
• board representation,
• pre-emption rights,
• tag-along rights,
• anti-dilution protections,
• restrictions on founder share transfers,
• and exit rights.

Without an appropriately drafted agreement, the investor may have limited contractual control over how the founders operate the company.

This is why sophisticated investors usually expect the shareholders’ agreement to be negotiated before completing the investment.

19. It Can Prevent Founders From Selling Too Early

Investors often invest primarily because they believe in the founding team.

If the founders sell their shares immediately after receiving investment, the investor may be left with a company lacking the people who created its value.

For this reason, shareholders’ agreements may contain founder lock-up provisions.

A lock-up may restrict founders from transferring shares for a specified period except in permitted circumstances.

This creates stability and aligns the founders’ interests with the long-term development of the company.

20. Death, Incapacity and Personal Events Should Not Be Ignored

Founders frequently discuss investment and exit but ignore death or incapacity.

Suppose a founder owning 40% dies.

Depending on the legal structure and inheritance situation, shares or economic interests may become subject to succession rules.

The remaining founders could unexpectedly find themselves dealing with heirs who have never participated in the startup.

A carefully drafted shareholders’ agreement can establish contractual mechanisms for dealing with events such as:

• death,
• permanent incapacity,
• bankruptcy or financial distress,
• divorce-related risks where relevant,
• loss of required professional qualifications,
• or other events affecting continued participation.

The applicable corporate, inheritance and mandatory legal rules must nevertheless be respected.

21. Exit Strategy Should Be Discussed Before the Startup Becomes Valuable

Founders rarely discuss exit strategy when the company is worth almost nothing.

This is precisely when they should discuss it.

Imagine two founders starting a company valued at TRY 500,000.

One founder’s objective is to build the company for twenty years.

The other founder intends to sell as soon as someone offers EUR 5 million.

Five years later, an international buyer offers EUR 8 million.

One founder considers it a life-changing opportunity.

The other refuses to sell.

Neither founder is necessarily acting irrationally.

They simply had different expectations from the beginning.

A shareholders’ agreement can reduce this risk by defining exit mechanisms and decision procedures in advance.

22. Dispute Resolution Should Be Agreed Before a Dispute Exists

Another critical provision concerns disputes.

If the shareholders later disagree, where will the dispute be resolved?

Possible mechanisms may include:

• Turkish courts,
• arbitration,
• mediation,
• negotiation procedures,
• or combinations of these methods.

For startups with foreign investors, arbitration may be considered because investors may prefer confidentiality and a neutral dispute resolution framework.

However, not every corporate dispute is arbitrable in the same manner, and mandatory jurisdictional rules should be assessed before drafting the clause.

The dispute resolution provision should therefore reflect the nature of the company, shareholders and likely disputes rather than simply copying a generic arbitration clause.

23. Contractual Remedies Should Be Clearly Defined

A shareholders’ agreement is valuable only if the consequences of breach have been considered.

Suppose a shareholder promises not to transfer shares without first offering them to the other founders but later violates that obligation.

What happens?

Possible contractual remedies may include:

• damages,
• contractual penalties,
• transfer obligations,
• put or call mechanisms,
• indemnification,
• or other remedies permitted under applicable law.

Because a shareholders’ agreement is fundamentally contractual under Turkish law, the distinction between contractual obligations and corporate validity becomes particularly important. A corporate act undertaken contrary to the shareholders’ agreement does not necessarily become automatically invalid merely because the contract was breached; depending on the circumstances, the remedy may instead arise against the breaching contracting party.

This is another reason why the agreement and the articles of association should be designed together.

24. Why Should a Shareholders’ Agreement Be Signed Before Investment?

The best time to agree on founder rules is generally before external investment.

Once an investor arrives, negotiations become more complicated.

The investor will introduce new requirements.

The economic stakes will also be higher.

Suppose two founders establish a business with no written agreement.

Two years later, the company is worth EUR 10 million.

Only then do they attempt to agree on:

• who controls the board,
• whether one founder can sell,
• what happens if someone leaves,
• how shares are valued,
• and whether the business may be sold.

Every clause now directly affects millions of euros.

Negotiation becomes significantly more difficult.

Early documentation can therefore save substantial time, money and conflict later.

25. Should Every Startup Have the Same Shareholders’ Agreement?

No.

A shareholders’ agreement should reflect the actual structure of the startup.

A company owned by two founders requires different provisions from a company owned by:

• three founders,
• two angel investors,
• one venture capital fund,
• and an employee option pool.

Likewise, a fintech startup may require different regulatory considerations from a software consultancy business.

The document should therefore be tailored according to:

• company type,
• founder structure,
• ownership percentages,
• investment history,
• intellectual property,
• management structure,
• regulatory environment,
• future financing plans,
• and exit objectives.

Generic online templates should be treated with considerable caution.

Common Shareholders’ Agreement Mistakes Made by Startups

Several mistakes appear repeatedly in startup practice.

The first is not having an agreement at all.

The second is downloading a foreign template and signing it without adapting it to Turkish law.

Other common mistakes include:

• giving founders equity without vesting,
• failing to address founder departure,
• failing to regulate intellectual property,
• creating excessive investor veto rights,
• ignoring 50/50 deadlock risk,
• drafting unclear share transfer provisions,
• failing to coordinate the SHA with the articles of association,
• failing to regulate future financing,
• failing to define exit rights,
• using unreasonable non-compete restrictions,
• overlooking inheritance and incapacity risks,
• failing to establish confidentiality obligations,
• and failing to determine consequences for contractual breach.

Each of these mistakes may appear theoretical during incorporation.

Once the company receives significant investment, they can become extremely expensive.

When Should a Startup Sign a Shareholders’ Agreement?

Ideally, founders should address these matters as early as reasonably possible.

A shareholders’ agreement may be prepared:

• before company incorporation,
• immediately following incorporation,
• when a co-founder joins,
• before an angel investment,
• during a seed investment,
• before a venture capital round,
• when significant ownership changes occur,
• or as part of a corporate restructuring.

The important point is not to wait until a dispute occurs.

A shareholders’ agreement is primarily a preventive legal instrument.

Its greatest value appears when the parties never need to litigate because the rules were clearly established in advance.

Shareholders’ Agreement Checklist for Turkish Startups

Before finalising a shareholders’ agreement, startup founders should generally consider whether the document addresses at least the following questions:

• Who owns what percentage of the company?
• Why were these percentages allocated?
• What must each founder contribute?
• Is founder vesting required?
• What happens if a founder leaves?
• What constitutes a good leaver or bad leaver?
• Who owns intellectual property?
• Can founders operate competing businesses?
• What information must remain confidential?
• Who manages the company?
• Who appoints directors?
• Which matters require special approval?
• How are deadlocks resolved?
• Can shareholders transfer shares freely?
• Do other shareholders have pre-emption or first refusal rights?
• Are tag-along rights required?
• Are drag-along rights required?
• How will future investment rounds be approved?
• What happens if shareholders are diluted?
• Are investors entitled to information or veto rights?
• How are founder salaries determined?
• What happens if additional financing is needed?
• What happens if a founder dies or becomes incapacitated?
• Under what conditions can the company be sold?
• How are disputes resolved?
• What remedies apply if a shareholder breaches the agreement?
• Which provisions should also be reflected in the articles of association?

If these questions have never been discussed, the startup has unresolved legal risks even if the founders currently have an excellent relationship.

Conclusion: Why Is a Shareholders’ Agreement Essential for Startup Founders?

A shareholders’ agreement for a startup in Turkey is not merely a document prepared for investors or large companies. It is one of the most important legal tools available to founders for defining their relationship before disagreements arise.

The early stage of a startup is usually based on trust.

The later stages are based increasingly on value.

When the business has little financial value, founders may easily agree that everything will be resolved fairly.

Once the company is worth millions of euros, the meaning of “fair” may become very different for each shareholder.

A properly drafted shareholders’ agreement can establish the rules before those financial interests diverge.

It can determine founder responsibilities, vesting, management rights, share transfers, investor protections, dilution mechanisms, intellectual property ownership, confidentiality obligations, deadlock procedures and exit rights.

It can also answer the most difficult question in any partnership:

What happens when the shareholders no longer agree?

The articles of association remain essential under Turkish corporate law, but they do not necessarily address every contractual issue arising between startup founders. Because shareholders’ agreements function primarily as private contracts, the relationship between the SHA, the articles of association, mandatory provisions of the Turkish Commercial Code and the Turkish Code of Obligations must be carefully analysed when preparing the documents.

For this reason, founders should avoid treating a shareholders’ agreement as a standard document that can simply be downloaded, signed and forgotten.

The agreement should instead be designed around the startup’s specific business model, ownership structure, investment strategy and long-term objectives.

A startup may change its product.

It may change its market.

It may change its investors.

It may even change its founders.

The legal framework governing the shareholders should be capable of managing those changes.

For founders planning to establish or scale a startup in Turkey, preparing a properly structured shareholders’ agreement together with the company’s corporate documents can significantly reduce founder disputes, improve investment readiness and create a more predictable legal framework for the future growth and eventual exit of the business.