Shareholders agreement for a special purpose vehicle

A special purpose vehicle exists to do one thing and then stop: own a property, deliver a project, hold a contract or run a single venture, with investors who want the returns from that thing and no exposure to anything else. The agreement has to confine the company to its purpose, set the funding and the order in which money comes out, define who does the work and what they are paid, deal with the lender that usually sits above the shareholders, and provide for the end of the project and the end of the company. I draft that agreement for the investors 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

Investors and operators in England and Wales using a single-purpose company for a property, a development, an energy project, a film, an event, a contract or a one-off venture, who want the money and the decisions agreed before the project starts.

What matters in a special purpose vehicle shareholders' agreement

Why a special purpose vehicle and what it may and may not do

The agreement should state the company's sole purpose, prohibit any other business, borrowing, security, guarantees, employees or assets beyond those the purpose needs, and make any departure a reserved matter, because the point of the vehicle is that its investors and its lender know exactly what it contains; it should also address the parent or sponsor's relationship with the vehicle (arm's length contracts, no cross-guarantees) so that the ring-fence holds if the sponsor's other businesses fail.

Funding, waterfall and the order in which money comes out

The agreement should set the funding (equity, shareholder loans, external debt) and the obligations to provide it, and a waterfall for distributions: external debt service first, then shareholder loan interest and repayment, then a preferred return to the investors where agreed, then profits shared in a stated ratio with any promote or carried interest to the operator, with distributions made within section 830 of the Companies Act 2006; the waterfall is the deal, and the agreement should state it in a worked order rather than in prose, with the accountants confirming it.

The operator, the manager and who does the work

One shareholder usually runs the project, and the agreement should define its role under a separate management or development agreement, its fees and when they are paid, its authority within the approved budget and programme, the matters it must bring to the investors, its reporting, and its removal for stated defaults, with the vehicle's directors (often one per investor group) owing duties to the vehicle under the Companies Act 2006; an operator paid a fee and a promote has interests that differ from passive investors paid only on exit, and the agreement should align them through the waterfall and the removal rights.

Lenders, security and the investors' guarantees

A vehicle's lender takes security over its assets and shares, registered under section 859A of the Companies Act 2006, often asks the investors for guarantees or cost overrun undertakings, and imposes covenants that override the shareholders' plans; the agreement should record the facility terms the shareholders have accepted, the guarantees each investor has given and the indemnities between them, the lender's consent rights and step-in, and what happens if the lender enforces, because the shareholders' agreement sits below the facility and should not promise what the lender forbids.

Decisions, information and the passive investors

The agreement should set the reserved matters for the investors (the budget and programme, changes to the project, borrowing, disposals, the operator's fees, distributions outside the waterfall, winding up), the thresholds by investment, the information passive investors receive (monthly or quarterly reports, accounts, notice of material events), and the investors' confidentiality; it should say that passive investors have no role in management and no liability beyond their committed funding, and should provide a deadlock mechanism where the investors are evenly matched.

The end of the project and the end of the company

The agreement should say what ends the project (practical completion and sale, expiry of the contract, a stated date), how the asset is sold or distributed (a sale with drag-along, a transfer to one investor at a valuation, or distribution in specie), how the vehicle is then wound up with the proceeds paid down the waterfall, and what survives (warranties on a sale, retention accounts, the operator's post-completion obligations); exits before the end (an investor's transfer, death or insolvency) should be dealt with by pre-emption and valuation, and the note on the articles addresses the share rights and 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

What is the difference between this and a joint venture agreement?

A joint venture is an ongoing business between parents; a special purpose vehicle is a single project that ends. The agreement is built around the waterfall and the wind-up rather than an indefinite relationship, though many provisions are shared.

Can the lender override our shareholders' agreement?

In practice, yes, where the facility's covenants and security require it. The agreement records the facility the shareholders have accepted and sits below it, so that the shareholders do not promise each other what the lender will not allow.

Our operator wants a promote. How is that documented?

In the waterfall, as a share of profits above a stated return to the investors, with the operator's fees in a separate management agreement. The agreement states the order in which every pound comes out.

Related guidance and services

• Shareholders agreement, £995, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Shareholders agreement for a joint venture company

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.