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shareholders agreements

If you are in the startup stage of your new company, or your company has grown beyond its startup stage, then it is probably time to formalise the relationship between shareholders with a legal agreement. Or perhaps your existing shareholders agreement is looking a bit out of date, and it needs to be amended to reflect the way the business has changed and operates. Either way, we can help.

A shareholders agreement is a legally binding private contract between all or some of the shareholders of a company, setting out key rules to ensure that the company runs smoothly. The agreement outlines the rights and responsibilities of each shareholder and provides a framework for governing the company.

Working with our company and commercial solicitors will help you ensure that your shareholders agreement is properly tailored to your business objectives and protects your interests.

What are the benefits of a shareholder agreement?

When a company is at startup stage, the relationship between shareholders may be quite informal and need formalising so the responsibilities of each shareholder are clear. As you grow you will also need to make key decisions, such as admitting new shareholders or taking external funding, and this vital company document will provide valuable clarity for the way you should approach these strategic situations.

If a disagreement or a dispute occurs, then the shareholders agreement provides a roadmap for you to resolve any dispute. In the worst case, there can also be a deadlock situation where a disagreement could bring operations to a standstill. A well-drafted agreement should include a provision to address such a deadlock.

Significantly, a shareholders agreement can create clear rules which protect the interests of minority shareholders. For example, by giving minority shareholders a veto right on decisions that a majority shareholder may otherwise try to enforce.

Your company will also benefit if it comes to seek external investment, as investors will be more confident that the company has a strong governance framework.


What should a shareholders agreement cover?

A shareholder’s agreement should be bespoke and drafted to address your company’s specific commercial objectives. Shareholders can freely negotiate the terms of the agreement and it will be a private document, allowing you to keep your business affairs confidential.

Usually, a well-drafted shareholders agreement will include the following key provisions:

  • Rules relating to decision making and the management of the company.
  • How to transfer shares, including pre-emption rights.
  • How minority shareholders are protected.
  • A dispute resolution procedure if there is a dispute between the shareholders.
  • How to resolve a deadlock situation (for example, if two shareholders each own an equal number of shares and disagree).
  • Rules on how dividends are paid.
  • Procedures relating to the appointment and removal of company directors.
  • What happens on the death or insolvency of a shareholder.
  • Bespoke provisions such as ‘good’ and ‘bad leaver’ clauses and ‘drag along’ or ‘tag along’ rights if the company is sold.
  • Controls around financing and the company’s ability to borrow.

Is your shareholders agreement up to date?

Your shareholders agreement should be updated as your business develops and grows. For example, your business priorities might change over time, and if you decide to seek external investment then investors may expect you to include various investor-friendly provisions. It is important to make sure you also review your shareholders agreement regularly and check that it covers important scenarios for your business.

Do you need advice on your position?

If your business already has a shareholders agreement, you may want to ensure that you understand it. For example, if you are looking to leave the business you will need to be clear about how to prepare for your exit and relinquish your shareholding.  

How we can help

If you need a new shareholders agreement, our expert corporate lawyers will advise you and draft it in a way that meets your specific objectives as your company grows.

We provide comprehensive support regarding company law issues and can also amend your other company documents to bring them in line with your shareholders agreement.

We can also act for individual shareholders who are negotiating a new shareholders agreement or changes to an existing agreement. Each shareholder might have different priorities and we can help guide you on how to address difficult issues with co-shareholders and negotiate an agreement that protects your best interests.

Why choose Geoffrey Leaver Solicitors?

Our corporate lawyers based in Milton Keynes have advised numerous shareholders and directors on all aspects of company law in respect of a range of companies from small startups to large multinational businesses.

To make an appointment to see one of our corporate solicitors, Tim Roberts, Danielle Austin  or Gemma Gurney please call on 01908 692769 or send an email to legal@geoffreyleaver.com.

What our clients say:

“Danielle is approachable and was very attentive as she kept me informed throughout the transaction. I found Danielle to be knowledgeable and she dealt with the matter efficiently. Thank you for all your help.” Simon Gristwood

You may also like to read some of our most recent testimonials from our company commercial clients to find out what others think about our Company Commercial and Corporate Law services.

The Company Commercial Team

  • Tim Roberts Senior Partner
    Company Commercial 01908 689356
    Tim Roberts is Head of the Department and the firm’s Senior Partner. He began his career as a solicitor in the City of London before moving to Geoffrey Leaver Solicitors Company Commercial department. He has over 30 years of experience in Company Commercial and specialises in all aspects of the sale and purchase of companies and businesses, including management buy-outs, corporate restructuring, banking and corporate finance.


  • Danielle Austin Senior Associate Solicitor
    Company Commercial 01908 689399
    Danielle Austin is a Senior Associate Solicitor who is experienced in dealing with Company and Commercial matters.


  • Gemma Gurney Solicitor
    Company Commercial 01908 689373
    Gemma is the newest member of our Company Commercial team.  After graduating from the University of Lincoln with an LLB, Gemma completed her Legal Practice Course at Leicester Institute of Legal Practice


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