A self-consistent two-fluid theory that includes the magnetic field and shear patterns therein is developed to model stationary electrostatic structures with field-aligned potential drops. Shear flow is also included in the theory since this seems to be a prominent feature of the structures of interest. In addition, Ohmic dissipation, a Hall term and pressure gradients in a generalized Ohm's law, modified for cases without quasi-neutrality are included. In the analytic theory, the electrostatic force is balanced by field-aligned pressure gradients, i.e., thermal effects in the direction of the magnetic field, and by pressure gradients and magnetic stresses in the perpendicular direction. Within this theory simple examples of applications are presented to demonstrate the kind of solutions resulting from the model. The results show how the effects of charge separation and shear in the magnetic field and the velocity can be combined to form self-consistent structures such as are found to exist above the aurora, suggested also in association with solar flares. ¿American Geophysical Union 1990