Corporate Shareholder Agreement Governance-Override Requirements in Montana

At a glance

Requirements one by one

Montana gives the agreement corporation-binding override effect

The route applies to a domestic for-profit corporation under Mont. Code Ann. § 35-14-140(5). A compliant agreement is effective among the shareholders and the corporation even when inconsistent with another Chapter 35-14 provision. It may eliminate or restrict the board, govern distributions, set directors and officers, divide voting power, govern property or service arrangements, transfer management or deadlock authority, require dissolution, or govern other corporate relationships not contrary to public policy (Mont. Code Ann. § 35-14-732(1)).

The distribution override remains subject to Mont. Code Ann. § 35-14-640(3), which bars a distribution that would leave the corporation unable to pay debts as due or fail the stated balance-sheet test.

Adoption is unanimous; amendment may use another agreed threshold

The agreement may appear in the articles or bylaws if all current shareholders approve it. Alternatively, every current shareholder signs a writing made known to the corporation. Amendment defaults to all shareholders at the time, but the agreement may state another rule (Mont. Code Ann. § 35-14-732(2)).

Shareholder means record shareholder. That class includes a beneficial owner identified in an on-file beneficial-ownership certificate to the extent of the rights it grants. If no shares have issued, incorporators or subscribers may act as shareholders (Mont. Code Ann. §§ 35-14-140(45),(49),(53), 35-14-732(7)).

Duration is agreement-set, with no statutory public cutoff

Section 35-14-732(8) states that duration limits, if any, must be set forth in the agreement. It supplies no ten-year or other default term, renewal rule, or legacy-agreement rule.

The section also states no public-corporation, exchange-listing, or regular- trading cutoff. Subsection (4) only supplies a cleanup power if the agreement ceases to be effective for some reason; it does not create a termination event.

Missing notice preserves validity but can trigger rescission

The agreement's existence must be conspicuously noted on outstanding share certificates or the cross-referenced information statement. Existing certificates must be recalled and replaced. Missing notice does not invalidate the agreement or an action taken under it (Mont. Code Ann. § 35-14-732(3)).

An unknowing purchaser may rescind. A compliant notation supplies considered knowledge; for uncertificated shares, the information statement also must be delivered by the time of purchase. The action is due by the earlier of ninety days after discovery or two years after purchase. Section 35-14-626(2) separately requires delivery of the specified written statement within a reasonable time after issue or transfer.

Transferred board power moves liability without piercing the entity

When the agreement limits board discretion or power, directors are relieved and the persons receiving that authority assume the corresponding director-law liability to the same extent. The agreement's existence or performance, partnership-like treatment, or failure to observe covered formalities may not be used by itself to impose shareholder personal liability (Mont. Code Ann. § 35-14-732(5)-(6)).

If the agreement ends and appears or is referenced in the articles or bylaws, the board may delete it and its references without shareholder action (Mont. Code Ann. § 35-14-732(4)).

What trips people up

Montana has no fixed statutory term. If the parties want a duration limit, the agreement itself is where subsection (8) requires it to appear.

The statute does not terminate the agreement merely because shares become publicly traded. A contractual IPO or listing clause is a contract term, not a current Section 35-14-732 cutoff.

Unanimity at adoption does not force unanimity forever. Section 35-14-732(2)(b) allows the agreement itself to establish a different amendment rule.

Common questions

Must the corporation sign the agreement?

No corporation signature is stated. The separate-writing route requires all current shareholders to sign and requires the agreement to be made known to the corporation; the articles or bylaws route uses unanimous current-shareholder approval (Mont. Code Ann. § 35-14-732(2)(a)).

Does a missing certificate notation void the agreement?

No. Section 35-14-732(3) preserves the agreement and actions taken under it, while giving an unknowing purchaser the separate rescission protection.

Does Montana impose a ten-year default?

No. The statute says only that duration limits, if any, must be stated in the agreement (Mont. Code Ann. § 35-14-732(8)).

Statutes and sources

• Mont. Code Ann. § 35-14-140(5),(45),(49),(53) — domestic corporation, record shareholder, beneficial-owner certificate, shareholder, and subscriber definitions. Official Montana Legislature text, accessed August 28, 2026.
• Mont. Code Ann. § 35-14-626(1)-(2) — uncertificated-share authorization and written information-statement delivery. Official Montana Legislature text, accessed August 28, 2026.
• Mont. Code Ann. § 35-14-640(1),(3) — distribution authorization and the solvency and balance-sheet limits preserved by the agreement statute. Official Montana Legislature text, accessed August 28, 2026.
• Mont. Code Ann. § 35-14-732(1)-(2) — corporation-binding override, permitted subjects, instruments, unanimity, and amendment. Official Montana Legislature text, accessed August 28, 2026.
• Mont. Code Ann. § 35-14-732(3)-(8) — notice, recall, purchaser rescission and deadlines, board cleanup, liability rules, the no-shares route, and agreement-set duration. Official Montana Legislature text, accessed August 28, 2026.