Shareholders Agreement Template (UK)
Create Your Professional Contract in Minutes

A comprehensive Shareholders Agreement should clearly define:

• Shareholder details - Names, addresses, and shareholdings of all parties
• Company details - Registration number, registered office, share structure
• Share transfer restrictions - Pre-emption rights, permitted transfers, valuation methods
• Drag-along rights - Majority shareholders can force minority to sell in a takeover
• Tag-along rights - Minority shareholders can join a sale on the same terms
• Anti-dilution provisions - Protection against share value dilution
• Board composition - Director appointment and removal rights
• Reserved matters - Decisions requiring unanimous or supermajority consent
• Dividend policy - Distribution timing and conditions
• Good leaver/bad leaver - Share treatment when shareholders leave
• Non-compete clauses - Restrictions on competing businesses
• Confidentiality obligations - Protection of company information
• Deadlock resolution - Mediation, arbitration, or buyout mechanisms
• Exit provisions - IPO, trade sale, buyback procedures

Our template includes all essential clauses for comprehensive shareholder protection.

Companies Act 2006 Default Position:

• No transfer restrictions: Shareholders can freely sell to anyone without consent
• Majority rule: 50%+ shareholders control all ordinary decisions
• No minority protection: Minority shareholders have limited rights beyond statutory minimums
• No exit guarantees: Minority shareholders can be trapped with no buyout rights
• No non-compete: Shareholders can start competing businesses immediately
• No drag-along: Minority can block beneficial sale offers
• No tag-along: Majority can sell leaving minority stranded

Common Shareholder Disputes:

Deadlocked decision-making, unwanted third-party shareholders, dividend disagreements, competing businesses by shareholders, forced dilution, valuation disputes on exit, director appointment conflicts. UK courts see thousands of shareholder disputes annually, many costing £50,000+ in legal fees.

A £10 agreement prevents £50,000+ legal battles.

Comprehensive Shareholder Protection:

• ✓ Complete shareholder and company details
• ✓ Share capital structure and classes
• ✓ Pre-emption rights on share transfers
• ✓ Permitted transfers (family, trusts, companies)
• ✓ Share valuation methodology
• ✓ Drag-along rights (majority can force sale)
• ✓ Tag-along rights (minority can join sale)
• ✓ Anti-dilution protection provisions
• ✓ Board composition and director appointments
• ✓ Reserved matters requiring special consent
• ✓ Dividend distribution policy
• ✓ Shareholder loan provisions
• ✓ Good leaver provisions (voluntary departure)
• ✓ Bad leaver provisions (dismissal for cause)
• ✓ Compulsory transfer events (death, bankruptcy)
• ✓ Non-compete restrictions
• ✓ Non-solicitation of employees/customers
• ✓ Confidentiality and IP assignment
• ✓ Deadlock resolution mechanisms
• ✓ Dispute resolution (mediation/arbitration)
• ✓ Exit provisions (IPO, trade sale, buyback)
• ✓ Amendment and variation procedures

Professional, legally binding, and Companies Act 2006 compliant.

Don't Make These Critical Errors:

• Relying only on Articles: Articles of Association are public and easily amended by 75% vote. Private shareholders agreements provide stronger protection.
• No pre-emption rights: Shareholders can sell to outsiders without offering shares to existing shareholders first.
• Missing drag-along: Minority shareholders can block valuable acquisition offers, sabotaging exit opportunities.
• No tag-along protection: Majority can sell to a third party leaving minority trapped with an unknown new shareholder.
• Weak reserved matters: Not specifying which decisions require unanimous consent allows majority to make unilateral major decisions.
• No deadlock mechanism: 50/50 shareholders with no tiebreaker creates company paralysis.
• Vague valuation terms: No agreed valuation formula leads to expensive expert disputes when shares transfer.
• No good/bad leaver terms: Departing shareholders keep full value even if fired for gross misconduct.
• Missing non-compete: Shareholders can immediately set up competing businesses using company knowledge.
• No compulsory transfer events: Bankrupt or deceased shareholder's shares pass to unknown third parties.

Our template prevents all these mistakes with clear, enforceable provisions.