Shareholders' Agreement Drafting

A shareholders' agreement is a private contract that sits on top of the company's articles and governs how the shareholders behave towards each other and the company. The drafting questions that matter most are: what decisions need shareholder consent and at what threshold; what happens when a shareholder leaves the business; who can sell shares and to whom; and how the company is governed at the board level.

What a shareholders' agreement does

A shareholders' agreement protects every shareholder's position by setting clear rules on decision-making, share transfers, dividends, and what happens when a shareholder leaves, whether as a good leaver or a bad leaver. Without one, shareholders rely entirely on the articles of association and the default rules of company law, which often leave significant gaps.

Beyond the core mechanics (reserved matters, leaver provisions, transfer restrictions, board appointment rights), the agreement should be drafted with the company's likely future in mind: a future investment round, a future sale, a possible founder departure. It should be consistent with the articles of association sitting underneath it.

This is suitable for early-stage companies, owner-managed businesses, and post-incorporation structuring. For investor-led rounds with complex anti-dilution, ratchet, or liquidation preference provisions, the work is more bespoke.

Example: a typical scope and fixed fee

For a UK private company with up to four shareholders and a single class of ordinary shares, the typical scope is as follows.

What's included

• A consultation to understand the company structure, shareholdings, and commercial priorities
• Drafting of a shareholders' agreement covering reserved matters, board composition, information rights, dividend policy, share transfer restrictions (pre-emption, drag-along, tag-along), good leaver / bad leaver provisions, non-compete and non-solicitation, deadlock resolution, and governing law
• One round of revisions based on your feedback
• Final version ready for execution

What's outside this scope

• Companies with five or more shareholders or multiple share classes (I can quote separately)
• Investor-led agreements with complex anti-dilution, ratchet, or liquidation preference provisions
• Amendments to existing articles of association to align with the shareholders' agreement (see Bespoke Articles of Association)
• Negotiation with the other party beyond the scope described above
• Tax advice

Fixed fee: £1,100, no VAT.

How I will approach your matter

Once you have instructed me, I will arrange a consultation to understand the company structure, shareholdings, and commercial priorities. The first draft reflects the structure we have agreed on; the revision round is for refinement. Where the shareholders' agreement will sit alongside bespoke articles, the Founder Pack is the more economical option.

Common questions

What if we have different share classes?

Multiple share classes (ordinary and preference, for example) introduce additional complexity around voting rights, dividends, and exit waterfalls. I can provide a quote once I understand the share structure.

Do I need to update my articles as well?

Usually, yes. The shareholders' agreement and articles should be consistent. If your articles are still the default model articles, I recommend updating them at the same time. The Founder Pack covers both as a bundle.