SHAREHOLDERS AGREEMENT
This Shareholders Agreement (this “Agreement”) is made on [effective date] between:
The Company: [company name] Limited, a private company limited by shares incorporated in England and Wales (company number [company number]), whose registered office is at [registered office address] (“the Company”);
Shareholder A: [shareholder a full name], of [shareholder a address];
Shareholder B: [shareholder b full name], of [shareholder b address].
Note: Add further parties above for each additional shareholder, following the same format. Each new party must also appear in Schedule 2 and in the Signatures section.
The Shareholders are together the “Shareholders” and each individually a “Shareholder.” The Company and the Shareholders are together the “Parties.”
1. Definitions and Interpretation
Note: This clause explains what the key defined terms in this Agreement mean wherever they appear with a capital letter.
1.1 Articles. The articles of association of the Company as amended from time to time.
1.2 Board. The board of directors of the Company from time to time.
1.3 Business. The principal business activity of the Company as described in the business plan approved by the Board from time to time, or as otherwise determined by the Board.
1.4 Business Day. Any day other than a Saturday, Sunday or public holiday in England and Wales when banks in London are open for business.
1.5 Confidential Information. All non-public information relating to the Company’s business, affairs, customers, technology, finances or plans, but excludes information that is or becomes publicly available other than through a breach of this Agreement.
1.6 Deed of Adherence. A deed substantially in the form set out in Schedule 4.
1.7 Fair Value. The value per Share agreed in writing between the relevant parties or, failing agreement within [pre-emption acceptance period] Business Days of a dispute arising, as determined by an Independent Valuer under Clause 6.
1.8 Good Leaver. A Shareholder who ceases to be employed or engaged by the Company by reason of death, permanent incapacitating illness, or any other reason the Board resolves in its reasonable discretion to be a good leaver event.
1.9 Independent Valuer. An independent chartered accountant agreed by the relevant parties or, failing agreement within 10 Business Days, appointed by the President of the Institute of Chartered Accountants in England and Wales.
1.10 Reserved Matters. The matters listed in Schedule 3.
1.11 Shares. Ordinary shares in the capital of the Company.
1.12 Shareholder Consent. Prior written consent of Shareholders holding not less than [reserved matters threshold] of the Shares for the time being in issue.
1.13 Transfer. Any sale, transfer, assignment, charge, pledge, or other disposal of Shares or any interest in Shares.
1.14 Where this Agreement conflicts with the Articles, this Agreement prevails as between the Shareholders, and the Shareholders shall procure that the Articles are amended to reflect this Agreement as soon as reasonably practicable. References to statutes include all amendments and re-enactments. Words in the singular include the plural and vice versa.
2. Shareholdings and Capital
This is a preview. The full template is free on GitLaw.
5.0 out of 5 on Google
Read reviewsAs seen in
About this template
What is this template?
This document is a governance contract for shareholders that supplements the company's articles of association. It contains specific financial thresholds for reserved matters and a Russian Roulette deadlock mechanism not found in standard articles. It is not a share purchase agreement or a set of company bylaws.
When should you use it?
Use this document when two or more parties are incorporating or investing in a UK company and require contractual control over share transfers and board appointments. Use a Joint Venture Agreement instead if the relationship is between two specific corporate entities for a limited project.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 3.3 | Board Meetings and Quorum | Requires a quorum for Board meetings including at least one director appointed by each Shareholder holding the specified appointment threshold. |
| 4.1 | Reserved Matters | Prohibits the Company from taking actions listed in Schedule 3, such as altering Articles, without Shareholder Consent from the defined majority. |
| 5.2 | Pre-emption on Transfer | Requires any Selling Shareholder to first offer their Shares pro rata to remaining Shareholders at the proposed price or Fair Value. |
| 5.5 | Drag-Along | Permits Shareholders holding a specified majority threshold to force all other Shareholders to sell their Shares to a third-party buyer. |
| 7 | Leaver Provisions | Determines whether departing employees transfer Shares at Fair Value or, for Bad Leavers, the lower of Fair Value and original price. |
| 9 | Deadlock Resolution | Provides a choice between 'Russian Roulette' buy-out offers or a members' voluntary winding up if a Reserved Matter remains unresolved. |
| 13.1 | Governing Law and Jurisdiction | Subjects the Agreement and any disputes to the law of England and Wales and the exclusive jurisdiction of its courts. |
Who it's for
- shareholders in a UK private limited company establishing governance and voting thresholds
- directors of a company needing to define board quorum and appointment rights
- founders implementing drag-along and tag-along protections for share exits
- UK business owners requiring bad leaver provisions for departing employee-shareholders
How long it runs and how it's signed
Law it's drafted under
England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
Frequently asked questions
A template isn't binding on its own - like any contract, it becomes binding once it's properly completed and signed. Templates in our curated library are professionally drafted for US or UK law; review any template before you sign it.
Yes. Chat with GitLaw to edit any section, or make changes directly in the editor.
Yes, read about team plans here.
Describe what you need in the chat and GitLaw will draft it for you.
Templates in our curated library are professionally drafted for US or UK law. The wider library comes from the GitLaw community and public sources - a solid starting point, but check any template fits your situation before you rely on it.
Mostly US and UK law. Some templates use general commercial terms that work across jurisdictions, and many note which law they're written for.
It depends on the situation. Templates work well for routine business agreements. For anything involving significant money, complex IP, employment, or areas you're unsure about, it's worth getting professional advice before you sign. GitLaw provides templates and tools, not legal advice.
Open any template in GitLaw and describe the change you want in the chat — 'make clause 4 mutual' or 'add a 30-day notice period', for example. GitLaw drafts the revised language and shows it as a suggested edit. You accept, reject, or keep editing from there.
Yes. Upload a Word, PDF, or Markdown file and GitLaw will open it in the editor. You can review, edit, or chat with GitLaw about it the same way you would with any template from the library.
Trusted by 5,000+ businesses
From template to signed, in one place
Every template opens in an editor with an AI agent alongside it.
Open
Pick a template and open it. Nothing to download, and no credit card to start.
Free to open
Edit with AI
Describe your situation in chat and the agent adapts the wording, clause by clause.
Tracked changes you can review
Send and sign
Share it for negotiation, then collect signatures without leaving GitLaw.
eSign included
Built for your legal work,
with practicing lawyers
Trained on 5,500+ clauses and specialist areas of law. Built with a standards committee of independent lawyers.
As seen in
Ready to get started?
No sales calls, no credit card. Just chat with GitLaw.
GitLaw provides templates and tools, not legal advice. Templates are a starting point, not a substitute for advice on your situation - for anything significant, speak to a qualified lawyer.