This template shareholders agreement is a contract between shareholders (and the company), setting out the rights and obligations of the shareholders (and the company) and setting out how the company should be run. The download contains two templates: the first can be used between existing shareholders of a startup or an established company; and the second can be used when introducing new shareholders via an investment round.
The shareholders agreement template is one of our most popular products. Since our launch, this template has been used by over 2,000 British businesses.
The download is an easy-to-edit .doc file, containing helpful directions on how to complete the agreement. You can simply edit the highlighted fields, or modify the wording of any part of the document to suit your individual requirements.
Contents of the Shareholders Agreement Template
- Title, date, parties, recitals
- Definitions and interpretation
- Undertakings and accession, including the terms under which a person or company may become a new shareholder, and employee share option scheme provisions
- Business of the company, what the company is supposed to do and covenants with the shareholders
- Management, for example how the company is expected to be managed
- Actions requiring approval, specifying what management actions require shareholder approval (referring to the attached schedule)
- Time limitations, including preventing the sale of shares for a specified period
- Rights of first refusal, giving shareholders first refusal rights on the sale of shares by other shareholders
- Rights of co-sale, giving all shareholders rights to equally sell their holding upon an offer to any shareholder
- Rights of information, ensuring the terms on which the management must disclose certain information to the shareholders, and reporting standards
- Investor liability, limiting the liability of the investor for issues arising prior to their accession (investment version only)
- Confidentiality, preventing the disclosure of certain confidential information
- Costs and expenses, for example how costs relating to the agreement should be apportioned
- Miscellaneous, for example methods of notice, statement of entire understanding, waiver, enforceability, and jurisdiction
- Schedule – Share table, specifying the share ownership
- Schedule – Actions requiring prior written approval
- Schedule – Contact details of the parties
What is a shareholders agreement?
A shareholders agreement ensures that the interests of a company’s management are aligned and in accordance with those of the shareholders, and ensures that new or existing shareholders act harmoniously towards each other, including with regards to the purchase or sale of shares to or from other parties.
As with any standard shareholders agreement, this template covers a number of issues with regards to company governance, for example management, reporting and information sharing. This helps to govern what the management can and cannot do without shareholder approval, and enhances the management’s accountability to the shareholders by ensuring shareholders are methodically updated with any information that is relevant to their ownership. The template also contains clauses that help to ensure that the company is operated, and the shareholders act, in accordance with any existing memorandum and articles of association.
As well as covering the standard terms and conditions that you can expect in any shareholders agreement, our template contains a number of ‘good practice’ clauses, for example a non-disclosure section covering the confidentiality of certain information. The template also contains clauses to cover rights of the shareholders over their actual shares, for example rights of first refusal and co-sale during the issuing or exchanging of shares between parties.
FREE Sample of the Shareholders Agreement Template
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