Shareholders Agreement Template (Three or More Parties) (A166)

Who can use this Shareholders Agreement Template?

The shareholders – i.e. the owners – of a limited company. This Shareholders Agreement template is designed for 3 or more  individuals rather than corporate members.  We also have a 2 party shareholders’ agreement

What is this Shareholders Agreement Template for?

A shareholders agreement will have a set of terms dealing with how the ownership structure will operate.  It is usually more practical than than the articles of association.  As well as dealing with capital contributions, governance and sales of shares, a shareholders agreement will often include restrictions on competition and special arrangements for individual participants.

What are the main issues?

These include:

Capital contributions of the members, including any capital in the form of assets or intellectual property.  Also the potential commitment of shareholders to additional capital or loans.

Directors and board arrangements. Who will be the directors, what will be their voting rights and how often will there be board meetings etc.

Bank accounts and authorisation of individual directors as well as the appointment of accountants/auditors are likely to be mentioned.

Share transfers. Shareholders in a private company cannot normally sell their shares to an outsider – existing shareholders will normally have first choice.  The shareholders’ agreement can set out the arrangements and how the share price will be decided. The rights of the concerned parties on the death of a shareholder may also be covered.

Good faith and non-competition. Shareholders will frequently be restricted from working in a competing business and these restrictions can continue after they leave the company.

Deadlocks and disputes.  If there is a major difference on the right direction of the company, a deadlock clause including mediation and the possibility of buying out one disaffected member can be covered in the agreement.

What detailed terms does the contract contain?

This twelve page document contains 19 clauses covering:

• interpretation
• business and name of the company
• capital
• profits policy
• directors, chairman and secretary
• meetings
• conduct of the business of the company
• bank accounts
• accounting information
• matters requiring the consent of all shareholders
• shares
• exercise of voting rights
• non-competition, restrictions and confidentiality
• transfers of shares
• default
• deadlock procedure
• notices
• governing law and resolution of disputes
• general clauses addressing the scope of the agreement, assignment, waiver, ambiguity and partnership

For more information on each of these sections, see our Explanatory Notes  which you will  receive when you download the document from our website.

If you want to see these Notes before you buy, please let us know by using our contact form

For information on signing documents see our Contract Signing page

When I download the document, can I change it and/or use it more than once?

Yes, all ContractStore’s templates are in MS Word and you can use the contract on more than one project. For more information, watch the video on this page of our website or see our FAQs

Legal support

ContractStore supplies templates and is not a law firm.  But all our templates are written by experienced lawyers so we can arrange legal assistance for customers who need special terms in one of our documents or a bespoke template. . For more information see our Legal Services page.

And if you want to contact us see our Contacts page.