Corporate Shareholder Agreement Governance-Override Requirements in Mississippi

At a glance

Requirements one by one

A qualifying agreement can override board-centered defaults

Mississippi makes a compliant shareholder agreement effective among the shareholders and the corporation even when it conflicts with another provision of the Business Corporation Act. Its menu reaches board elimination or restriction, distributions subject to Section 79-4-6.40, director and officer selection or removal, weighted or divided voting and director proxies, insider property or services arrangements, transferred management and deadlock power, dissolution triggers, and other governance terms not contrary to public policy (Miss. Code § 79-4-7.32(a)).

Formation and default amendment are unanimous

The agreement may be in the articles or bylaws and approved by every person who is then a shareholder. Or every current shareholder may sign a separate writing and make it known to the corporation (Miss. Code § 79-4-7.32(b)). The separate writing need not make the corporation a signing party or use a statutory consideration formula.

Unless the agreement provides another rule, amendment requires all persons who are shareholders at the amendment time. The initial and amendment groups are therefore separate current-holder snapshots. The statute states no separate revocation threshold, affected-holder veto, transferee signature, successor assent, or transferor rule.

Before shares issue, incorporators or subscribers may act as shareholders for the agreement (Miss. Code § 79-4-7.32(g)). A shareholder includes a registered holder or a beneficial owner to the extent of rights granted by a nominee certificate (Miss. Code § 79-4-1.40(4), (22), (26), (29)).

Silence produces a ten-year term

The agreement is valid for ten years unless it provides otherwise. The ten-year period is a default rather than an absolute maximum; the agreement may choose a different term. Section 79-4-7.32 states no separate renewal or legacy-agreement rule (Miss. Code § 79-4-7.32(b)).

Notice omission preserves validity but can support rescission

The agreement's existence must be noted conspicuously on every outstanding certificate or on the information statement for uncertificated shares. If certificates are outstanding when the agreement is made, the corporation must recall them and issue compliant substitutes. Missing notice does not invalidate the agreement or an action under it (Miss. Code § 79-4-7.32(c)).

A purchaser who lacked knowledge when purchasing may rescind. Compliant notice creates deemed knowledge; for uncertificated shares the information statement must also be delivered at or before purchase. The action must begin by the earlier of 90 days after discovery or two years after purchase. The section does not supply an alternative nondisclosure-damages remedy.

Public status ends the statutory effect and transferred power moves liability

The agreement ceases to be effective when the corporation becomes public. A public corporation is one whose shares are nationally listed or regularly traded in a market maintained by members of a national or affiliated securities association. After any cessation, the board may delete an agreement or references from the articles or bylaws without shareholder action (Miss. Code § 79-4-7.32(d)-(f)).

To the extent the agreement limits board discretion or power, directors are relieved of director-law liability and the persons receiving the power assume that liability. The agreement, partnership-like treatment, or failure to observe formalities applicable to covered matters cannot by itself impose personal liability on a shareholder for corporate acts or debts.

What trips people up

The ten-year rule is a default, not a cap. Silence produces ten years, while the agreement may state a shorter or longer period.

Adding a legend only to future certificates is insufficient when certificates are already outstanding. The corporation must recall and replace them.

The public cutoff uses Mississippi's defined term. It is triggered by national listing or the specified regular association-member market trading, not merely by calling the company “public.”

Common questions

Must the corporation sign the separate agreement?

Section 79-4-7.32(b) does not state a corporation-signature requirement. Every current shareholder signs, and the agreement must be made known to the corporation.

Can the agreement last longer than ten years?

Yes. Ten years is the default only; the agreement may provide another term.

Who may act before any shares issue?

Incorporators or subscribers for shares may act as shareholders when no shares have been issued.

Statutes and sources

• Miss. Code § 79-4-1.40(4), (22), (26), (29) — domestic corporation, public corporation, shareholder, and subscriber definitions. Official 2006 SB 2592 enrolled text, accessed August 28, 2026.
• Miss. Code § 79-4-7.32(a) and Miss. Code § 79-4-7.32(b) — override effect, subjects, formation, amendment, and ten-year default. Official 2006 SB 2592 enrolled text, accessed August 28, 2026.
• Miss. Code § 79-4-7.32(c) — notice, recall, validity, knowledge, rescission, and deadlines. Official 2006 SB 2592 enrolled text, accessed August 28, 2026.
• Miss. Code § 79-4-7.32(d)-(f) — public cutoff, board cleanup, liability shift, and shareholder protection. Official 2006 SB 2592 enrolled text, accessed August 28, 2026.
• Miss. Code § 79-4-7.32(g) — incorporator/subscriber route before shares issue. Official 2006 SB 2592 enrolled text, accessed August 28, 2026.