Dividends are paid to shareholders out of profits of the company (after taking into account past losses). In the absence of an agreement to the contrary, a majority shareholder can ultimately decide whether and how much of an available dividend is paid to the shareholders. Minority shareholders have hardly any influence here. Lets take the example of a company with two well-off shareholders holding 30% each of the shares in a company, and a further not so well-off shareholder holding 40%. The well-off shareholders decide that all profits should be retained by the company for investment in new projects, rather than paid out to the shareholders as dividend. Because the two 30% shareholders have a majority between them (60%), the 40% shareholder will not have the right to receive a dividend from the company, even if they desperately need the money. A shareholders agreement can set-out the dates and amounts of available dividends that should be paid to the shareholders after the company becomes profitable. This will allow the shareholders to better prepare their future personal finances.