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The Shareholder Operating Agreement serves as a fundamental document for companies registered in Malaysia that have multiple shareholders. It becomes particularly crucial when establishing new companies, bringing in new investors, or formalizing existing shareholder relationships. This agreement, governed by Malaysian law including the Companies Act 2016, provides a comprehensive framework for corporate governance, shareholder rights, and operational procedures. It addresses key aspects such as share transfers, voting rights, dividend policies, and dispute resolution mechanisms, while ensuring compliance with both civil law and, where applicable, Shariah principles. The document is essential for protecting shareholder interests, preventing potential conflicts, and establishing clear protocols for company management and decision-making processes.

1. Parties: Identification of all shareholders and the company as parties to the agreement

2. Background: Context of the agreement, including company formation details and purpose

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Company Structure and Shares: Details of share classes, rights, and ownership structure

5. Capital Contributions: Initial and subsequent capital contributions requirements

6. Shareholders' Rights and Obligations: Core rights and duties of shareholders

7. Management and Decision Making: Governance structure, board composition, and decision-making processes

8. Meetings and Resolutions: Procedures for shareholder and board meetings

9. Transfer of Shares: Rules and restrictions on share transfers, including right of first refusal

10. Exit Provisions: Mechanisms for shareholder exit, including tag-along and drag-along rights

11. Dividend Policy: Rules governing dividend declarations and distributions

12. Financial Matters: Financial management, reporting requirements, and audit provisions

13. Confidentiality: Protection of company and shareholder confidential information

14. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee solicitation

15. Dispute Resolution: Procedures for resolving disputes between shareholders

16. Term and Termination: Duration of the agreement and termination provisions

17. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law