Shareholders agreement with reserved matters

Reserved matters are the decisions a company may not take without the consent of a shareholder or a stated majority of them, and the list is where most of the protection in a shareholders' agreement lives. Too short and a minority is unprotected; too long and the company cannot act. The list has to contain the decisions that could change the deal the shareholders made, set a threshold that reflects the holdings, leave the directors to manage everything else, and be enforceable when a decision is taken in breach. I draft the agreement, 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

Shareholders in England and Wales who want to know which decisions need their consent and which do not, from minority investors seeking protection to majority holders who want the limits of a minority's veto defined.

What matters in reserved matters

What reserved matters are and why they exist

The Companies Act 2006 and the articles give the directors the management of the company and reserve to the shareholders only the decisions the Act or the articles require (changing the articles under section 21, removing a director under section 168, approving certain transactions with directors, winding up); everything else is the board's, and a shareholder with a minority of the votes can stop none of it. Reserved matters add, by contract and by matching articles, a list of decisions that need the consent of the shareholders or of a stated class or percentage, so that the protection does not depend on the voting arithmetic.

The matters that belong on the list

The list should contain the decisions that could change what the shareholders bargained for: issuing shares or options, changing the articles or share rights, selling the company or its business or a material asset, acquiring a business, borrowing or granting security above a limit, changing the nature of the business, entering transactions with shareholders or directors or their connected persons, directors' remuneration above a stated level, appointing or removing directors, declaring dividends outside the policy, approving the annual budget and material departures from it, starting or settling litigation above a value, and winding up; a list that includes hiring, pricing and supplier contracts in the ordinary course is a list that stops the company.

The consent threshold and who holds the veto

The agreement should say whose consent each matter needs: all shareholders, a stated percentage, a named shareholder (an investor, a founder) while they hold a stated percentage, or each class, and should test the threshold against the actual holdings so that it produces the intended veto and no other; matters can be tiered, with the fundamental ones needing unanimity and the rest a majority, and the agreement should say how consent is given (in writing, at a meeting, by a shareholder's board representative) and within what period, with a deadlock mechanism where consent is withheld.

What the directors decide without consent

The agreement should say expressly that matters not reserved are for the board, that the board acts within the approved budget and business plan, and that the shareholders will not interfere with management outside the reserved matters; the directors owe duties to the company under section 172 of the Companies Act 2006 and must exercise independent judgment under section 173, so a reserved matters list does not displace the board's responsibility, and a shareholder whose consent is required for a decision is not thereby a director, though a shareholder who in practice directs the board risks being a shadow director under section 251.

Enforcing a reserved matter and the decision taken in breach

A decision taken without a required consent is a breach of the agreement by the shareholders who procured it, giving the others a claim for damages or an injunction, but it may still be effective as against third parties; to make the restriction bite, the articles should contain the reserved matters as restrictions on the directors' authority, so that a director who acts in breach acts outside their authority and the shareholders can act under section 33 of the Companies Act 2006, and the agreement should require the directors appointed by each shareholder to vote against a reserved matter that lacks consent. The note on the articles sets out the provisions needed.

Keeping the list current

A list drafted for a start-up with two founders does not suit the same company with an investor, employee shareholders and a bank, and the agreement should provide for the list to be reviewed on stated events (a funding round, a change of control, a stated anniversary), for thresholds to change as holdings change (a named shareholder's veto falling away below a stated percentage), and for the agreement to be amended by a stated majority with each affected class's consent; a reserved matter that the shareholders routinely ignore because it is impractical is evidence against the ones they want to enforce.

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

What should be on our reserved matters list?

The decisions that could change the deal: shares, the articles, a sale, borrowing, the business, connected-party transactions, directors' pay, dividends outside the policy and winding up. Not the day-to-day, which stops the company. The briefing session is where the list is settled.

Can a minority shareholder veto decisions without an agreement?

Only special resolutions, and only if they hold more than a quarter. Everything else is the board's or the majority's. Reserved matters give the minority a veto by contract and the articles.

What happens if the board does something on the list without consent?

The shareholders who procured it are in breach of the agreement, and if the articles contain the restriction the director acted outside their authority. The agreement provides for damages and injunctions; the articles make the restriction bite.

Related guidance and services

• Shareholders agreement, £995, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Shareholders agreement with a majority and a minority shareholder

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.