Shareholders agreement for a restaurant or bar

Restaurants and bars are usually owned by an operator who runs them and an investor who paid for the fit-out, with a lease in the company's name, a premises licence held by someone, personal guarantees given by whoever the landlord asked, and cash moving through tills every night. A shareholders' agreement for a hospitality company has to deal with all of that: who runs the floor, who carries the guarantees, how the cash is controlled, what happens to a name above the door on a departure, and how an owner gets out of a business that cannot easily be sold. Drafting for all the owners together, I start with a briefing session, deliver the agreement with a note on its fit with the articles, and charge a fixed £995 for delivery in five working days.

Who this is for

Owners in England and Wales of restaurants, bars, cafes, pubs and food businesses operating through a company with more than one shareholder, from an operator-investor pair to a group of friends who opened a place together.

What matters in a restaurant or bar shareholders' agreement

The operator, the investor and who runs the floor

The agreement should record who runs the business day to day (the operator, with authority over staff, suppliers, menus and pricing), what the investor contributed (capital, premises, the fit-out) and what the investor decides (the reserved matters: borrowing, a second site, a sale, the operator's pay above a stated level, transactions with either owner's connected persons), and how the operator is paid for working (a salary under a service agreement) as distinct from what both receive for owning (dividends under a policy); an investor who second-guesses the menu and an operator who treats the till as salary are the two failures the agreement is drafted against.

The lease, the licence and the personal guarantees

The lease is usually in the company's name with a personal guarantee from one or more owners, and the agreement should record who has guaranteed what, require the company and the other owners to indemnify a guarantor for amounts paid under the guarantee beyond their share, and provide for the guarantee to be released or replaced when a guarantor sells their shares; the premises licence under the Licensing Act 2003 is held by the company with a designated premises supervisor who holds a personal licence under section 15 of that Act, and the agreement should say who that is, what happens if they leave, and that the owners will cooperate on licensing matters. Security of tenure under the Landlord and Tenant Act 1954 is a matter for the lease.

Cash, tills and the owners' drawings

Hospitality is a cash business, and the agreement should set the controls the owners agree to: who banks, who authorises payments above a limit, dual authorisation on the company's bank account, the accounting system and who sees it, monthly accounts to all owners, a dividend policy within section 830 of the Companies Act 2006, and a rule that no owner takes money from the business other than salary and dividends decided under the agreement; loans to directors need shareholder approval under section 197 of the Act, and an owner's drawings against future dividends are loans.

The chef, the name and the brand

Where the business trades on a chef's or an owner's name or reputation, the agreement should say who owns the name and the brand (the company, with an assignment under the Trade Marks Act 1994 and the Copyright, Designs and Patents Act 1988 of any rights the individual holds), what happens to the name if that person leaves (a licence for a period, a rebrand, or the name going with the person at a price), and what the person's commitment to the business is (hours, exclusivity, other ventures); a restaurant that loses its chef and the right to its name has lost its business, and the agreement should decide which of those the company keeps.

Exits and ceasing to work in the business

The agreement, with matching articles, should require an owner who stops working in the business to offer their shares to the others at a stated valuation (a multiple of maintainable profits, net assets, or an accountant's determination), with good and bad leaver terms, payment by instalments from the business's cash flow, and release from guarantees; it should also provide for an owner who wants to sell while remaining involved, with pre-emption for the others and a right of first refusal, because a minority stake in a restaurant has no market and the price is whatever the other owners will pay.

A second site, a sale or a closure

The agreement should make a second site, a franchise or a sale reserved matters, should provide drag-along and tag-along for a sale of the company, should say how the owners decide to close if the business fails (the lease, the staff, the suppliers and the guarantees), and should address the owners' obligations if the company becomes insolvent, where the directors' duties under the Insolvency Act 1986 to creditors take over and the owners' personal guarantees are called; the note on the articles says what must go into them, since only the articles bind every shareholder under section 33 of the Companies Act 2006, and the agreement should be revisited when the business expands.

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

I guaranteed the lease and my partner did not. What does the agreement do about that?

It records the guarantee, requires the company and your partner to indemnify you for amounts paid beyond your share, and provides for release or replacement when you sell. It cannot release you from the landlord; only the landlord can.

Our chef holds twenty per cent and his name is above the door. What if he leaves?

The agreement decides who owns the name and what happens to it on his departure, with his shares bought at the leaver price. Without it, he may own the name and you may own a restaurant with no name.

Can the investor take money out when the business is doing well?

Through dividends under the policy, decided by the board within it, and through any agreed repayment of a shareholder loan. Not by drawings, which are loans needing approval.

Related guidance and services

• Shareholders agreement, £995, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Shareholders agreement for a company where one shareholder funds it and another runs it
• Shareholders agreement for a gym or fitness studio

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.