Shareholders agreement for an agency owned by its directors

Agencies are owned by the two or three people who run them, each of whom brought in clients, runs a part of the business and expects to share in the sale one day. The agreement has to divide the roles and the money, decide whose the clients are, deal with departures and the client accounts affected, let the directors bring in a successor, and set the exit the directors are building towards. I draft that agreement for the director shareholders together, with a briefing session and a note on how it fits the articles, for a fixed fee of £995, delivered in five working days.

Who this is for

Creative, marketing, digital, PR, recruitment and events agencies in England and Wales owned by their working directors, from two founders to a wider group, who want the arrangement between them written down.

What matters in a director-owned agency's shareholders' agreement

The directors' roles and the division of the business

The agreement should record each director's role (new business, client service, creative, operations, finance), the authority each has within it, the matters reserved to all the directors or a stated majority, and the time commitment each makes, with service agreements for the employment side; agencies divide naturally by client and by discipline, and an agreement that does not say who runs what leaves the division to be argued when it matters, usually when a client is unhappy or a director is.

Pay, dividends and the agency's cash

Directors are paid salaries under service agreements set by a process the agreement states, with bonuses by reference to the agency's results, and dividends under a policy (a stated proportion of distributable profits within section 830 of the Companies Act 2006 after retaining working capital, decided by the board within the policy); agencies run on cash that arrives late and leaves early, and the agreement should set a retention policy and a process for directors' drawings so that one director's dividend does not become another's overdraft.

Client accounts, pitches and who owns the relationship

The agreement should state that clients, pitches and the agency's work belong to the company, that a director's relationship with a client is held for the company, that client contracts are with the company and in its name, and that the IP in the agency's work is the company's, assigned by the directors under section 90 of the Copyright, Designs and Patents Act 1988 where any was created before incorporation; a director who treats their accounts as their own is the agency's biggest risk, and the agreement should say plainly whose they are.

A director's departure and the accounts affected

The agreement, with matching articles, should require a departing director to transfer their shares at a price depending on why they left, should impose a non-solicitation of clients and staff for a reasonable period as a shareholder covenant, mirrored in the service agreement, and should treat a director who leaves and takes an account, or who sets up in competition in breach, as a bad leaver; the covenants protect the goodwill the director owned and are enforced more readily for that reason, and the valuation should be adjusted where the leaver's departure takes revenue with it.

Bringing in a new director shareholder

Agencies promote from within and bring in a new director with a stake, and the agreement should provide for it: the approval needed, whether the new shareholder subscribes for new shares or buys from existing ones, the price (a formula or a valuation), vesting for the new shareholder, and the option of growth shares so that the new director shares in future value without paying for the past, with the tax advised on by the accountants and the Enterprise Management Incentives rules under Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003 considered for options.

The exit the directors are working towards

Most agency directors intend to sell, and the agreement should say how: drag-along at a stated majority so that an offer the majority accepts takes everyone, tag-along so that no director sells control alone, the directors' agreement on an earn-out and the obligation to stay through it, a management buy-out by the next generation as an alternative, and a deadlock mechanism for the day the directors disagree about whether to sell; the note on the articles addresses the transfer provisions under section 33 of the Companies Act 2006.

What it costs

Shareholders agreement, £995. An agreement between the shareholders of a private company, with a note on how it interacts with your articles. Five working days.

Buying online forms the engagement on payment. The scope is what the shareholders agreement page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A briefing session with all shareholders together, to work through the questions people avoid asking each other
• A shareholders agreement drafted for your actual situation rather than a precedent with the names changed
• A note on how the agreement interacts with your articles, and whether the articles need amending to make it work
• A plain English explanation of every material choice, so nobody signs something they have not understood
• One round of amendments
• Signature-ready documents

What is not included

• Acting for individual shareholders separately, because I act for you jointly
• Company valuation
• Tax structuring, which needs your accountant and should run alongside this
• Amended articles of association and IP assignments, which I quote separately
• Filing at Companies House
• Resolving a dispute that has already started

Questions I am often asked

My co-director brought in our biggest client. If he leaves, is it his?

Not under the agreement, which makes clients the company's and binds a leaving director to a non-solicitation. Whether the client follows him anyway is a commercial question; the covenant and the leaver valuation deal with the consequences.

How do we bring in our account director as a shareholder?

By new shares, a transfer from the existing directors, or growth shares that share future value, with vesting and the approval the agreement requires. The accountants advise on which suits the tax position.

We want to sell in five years. Does the agreement help?

It sets drag-along and tag-along so that a sale happens on agreed terms, requires the directors to support an earn-out, and gives a buy-out alternative. The company planning to sell page covers the preparation.

Related guidance and services

• Shareholders agreement, £995, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Shareholders agreement for a consultancy owned by its consultants
• Shareholders agreement for a company planning to sell within five years

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.