Shareholders agreement when a shareholder wants to leave

A shareholder who wants to leave a private company discovers that there is nowhere to go: no market for the shares, no obligation on anyone to buy, and a stake that is worth what the others will pay for it. The agreement provides the route out, the price, the buyer and the terms, and deals with everything else the leaver takes with them or leaves behind: a directorship, personal guarantees, loans to the company, clients and staff. I draft the agreement for all the 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; where a departure is already under way, the agreement can be drafted to settle it.

Who this is for

Shareholders in England and Wales who want a route out agreed while everyone is on good terms, and shareholders in companies where someone has already said they want to leave and the others want it done cleanly.

What matters when a shareholder wants to leave

What a departing shareholder can do without an agreement

Without an agreement, a shareholder who wants to leave can resign as a director and employee, keep their shares, and wait: the articles (usually the model articles in the Companies (Model Articles) Regulations 2008) let the directors refuse to register a transfer to an outsider but oblige nobody to buy, dividends are at the directors' discretion, and the remedy for a shareholder excluded from a business they helped build is a petition for unfair prejudice under section 994 of the Companies Act 2006, which is slow and uncertain; a leaver can also sell to anyone the directors will register, which may be the last person the others would choose. The agreement replaces that with a process.

The route out the agreement provides

The agreement, with matching articles, should give a shareholder who wants to leave a right to serve notice requiring the others or the company to buy their shares, or an obligation to offer them under pre-emption with a right to sell outside if nobody buys, with the timetable, the valuation and the payment terms stated; it should say whether the right can be exercised at any time or only after a stated period or on stated events, and should distinguish a shareholder who leaves the business (a leaver, whose shares are subject to compulsory transfer) from one who wants to sell while staying involved (a transfer under pre-emption).

The price and who pays it

The agreement should set the valuation method (an accountant's determination on a stated basis, a formula, or a price agreed within a stated period), whether a minority discount applies, the date of valuation, the categories (good leaver at fair value, bad leaver at a lower price) where the shareholder worked in the business, and the payment terms (instalments over a stated period, interest, security), with the company as buyer under section 690 of the Companies Act 2006 where it has distributable profits and the approval section 694 requires, or the other shareholders in proportion; a route out at a price nobody can pay is a route to a dispute, and the payment terms should match what the business can afford.

The leaver's director role, guarantees and loans

The agreement should require a leaving shareholder to resign as a director (and provide for their removal under section 168 of the Companies Act 2006 if they will not), deal with their service agreement and its notice, release them from personal guarantees or indemnify them until release, repay or transfer any loan they have made to the company on stated terms, and settle their directors' loan account; a leaver who remains on the bank guarantee or is owed money by the company has not left, and the agreement should close each of those positions.

Covenants, confidentiality and the business after they go

The agreement should impose on a leaving shareholder confidentiality that survives, a non-solicitation of clients and staff for a reasonable period, and a non-compete only where the business can justify one and a court would enforce it, given as a shareholder's covenant protecting the goodwill they are being paid for; it should provide for the handover of the leaver's work, accounts and relationships, and should say what the leaver may say about their departure, because a business whose founder has left needs to tell its customers something.

The departure that has already begun

Where a shareholder has already said they want to go, the agreement can be drafted as a settlement of the departure: the price, the terms, the resignations, the releases, the covenants and the mutual waivers, signed by all the shareholders and the company, with the share transfer and the Companies House filings completed on signing; the shareholders are advised jointly where their interests allow it and told to take separate advice where they do not, and the agreement is drafted so that the departure is final, with the remaining shareholders' agreement amended for the company that continues. 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

I want to leave but nobody will buy my shares. What are my options?

Without an agreement, to sell to anyone the directors will register, or to petition for unfair prejudice if you are being excluded. With an agreement, to serve notice and be bought out at the stated valuation on the stated terms. The agreement is the difference.

Can the company buy a leaver's shares?

If it has distributable profits and the shareholders approve the buy-back as the Companies Act requires. Otherwise the other shareholders buy, or the company pays in instalments as profits allow. The agreement provides for whichever the business can fund.

A shareholder has already told us they are leaving. Is it too late for an agreement?

It is not too late. The agreement can be drafted as a settlement of the departure, with the price, the resignations, the releases and the covenants, and the remaining shareholders' agreement amended for the company that continues.

Related guidance and services

• Shareholders agreement, £995, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Shareholders agreement with vesting and good and bad leaver terms
• Shareholders agreement after a dispute between directors

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.