The shareholders of a company are likely to know the business inside-out, including its customers and suppliers. In order to protect the business of the company, a shareholders agreement should include non-compete provisions. The shareholders can agree that:

• while the shareholder holds shares; and
• for a reasonable period, after those shares are sold,

the shareholder is not permitted to set-up a rival business or otherwise compete with the company. This restriction should apply to a defined territorial area and for a defined time after the shareholder sells their shares.

In an effort to protect the business of the company, shareholders agreement often contain provisions to prevent shareholders from:

• Poaching staff employed by the company;
• Poaching customers of the company; and
• Interfering with the supplier of the company (e.g. procuring that a supplier no longer supplies goods to the company).

These provisions should apply while the shareholders hold their shares and for a reasonable period after those shares have been sold.

A shareholders agreement can impose an express duty of confidentiality on the shareholders in relation to company information, including information relating to:

• Customers and suppliers of the company;
• The business and the company itself; and
• The terms of the shareholders agreement.

This duty of confidentiality should continue after the shareholders cease to hold shares in the company.