Shareholders' Agreement Template (UK)

A shareholders' agreement is a private contract between the shareholders of a company that sets out how the business is owned and run: who can sell shares and to whom, which decisions need everyone's consent, and what happens when a shareholder leaves, dies or falls out with the rest. This page covers what belongs in a UK shareholders' agreement template — starting with the clauses that decide those moments — and how to download ours free.

The agreement works alongside the articles of association but does a job the articles cannot. Articles are public — any person may inspect the register kept by Companies House (Companies Act 2006, section 1085) — and where a company amends its articles it must send a copy of the amended articles to the registrar not later than 15 days after the amendment takes effect (section 26). A shareholders' agreement is usually not filed, and that privacy is much of its appeal. The exception is worth knowing: under sections 29 and 30, an agreement agreed to by all the members that would not have been effective unless passed as a special resolution must be sent to the registrar within 15 days — and once filed it is public. An agreement drafted to bind the shareholders between themselves, rather than to do the work of a constitutional change, stays off the register. As an ordinary contract it can also carry personal promises the articles are not designed to hold: a commitment to fund the company, a restraint on competing, an agreement to vote a certain way. Where a shareholder wants someone else to vote their shares for them, our free general power of attorney template covers appointing an attorney.

Deadlock and leavers: what happens when shareholders fall out

Two provisions do the hardest work when the relationship breaks down. The first is deadlock resolution — for a company split 50/50, a route out when the shareholders simply cannot agree: escalation, then mediation, then a buy-out mechanism. Without one, every significant decision can stall, and the routes that remain are slow, expensive and usually worse for everyone than a clause agreed in advance. Leaving a deadlock clause out of a 50/50 company is the most common and most expensive omission.

The second is good leaver and bad leaver provisions — what happens to a shareholder-employee's shares on resignation, retirement, dismissal or death, and at what price. Tie the price to a valuation formula, so any argument is about applying it, not inventing one mid-dispute.

Which document should a term live in? A working rule: the articles bind the shares, a shareholders' agreement binds the people. Rights that must follow the shares into whoever holds them next — share classes, transfer restrictions, leaver and vesting mechanics that operate on the shares themselves — belong in the articles of association, which bind the company and its members, including anyone who becomes a shareholder later. Personal promises between the current shareholders — an agreement to vote a certain way, a commitment to fund the company, a restraint on competing — belong in the shareholders' agreement, which binds only its signatories and is usually private. Leaver terms often sit in both: the articles carry the mechanism that acts on the shares, the agreement carries the personal promises around it, and the two documents must be drafted to match.

When you need a shareholders' agreement

• Two or more founders incorporating together — above all a 50/50 split, where one disagreement can stall every decision.
• Bringing in an investor or selling a stake — transfer and consent rights suddenly matter to everyone.
• Family companies, where shares could pass under a will or on divorce to someone who has never set foot in the business.
• Employee shareholders — small stakes need leaver provisions, and the employment relationship itself belongs in a separate employment contract.
• Before any dispute exists — after a falling-out, agreeing rules is near impossible.

What a shareholders' agreement should cover

Alongside the deadlock and leaver provisions above, these clauses do the real work:

• Pre-emption rights on transfer — a shareholder who wants out must offer their shares to existing shareholders first, so a stranger cannot buy in over your heads. This fills a real gap, and the two kinds of pre-emption are easily confused: the statutory right in section 561 of the Companies Act 2006 bites when a company allots new equity securities, and is itself subject to exceptions, exclusion and disapplication under sections 564 to 573. It does not control the transfer of shares that already exist. Pre-emption on a transfer exists only where the articles or the agreement create it.
• Drag-along rights — let a majority accepting an offer for the whole company require everyone else to sell on the same terms, at whatever threshold the agreement sets; buyers usually want every share or none.
• Tag-along rights — the mirror image: a minority may insist on joining a majority sale on the same terms rather than being left behind with a new controller.
• Permitted transfers — the narrow exceptions (family, trusts, group companies) that may bypass pre-emption, and nothing else.
• Reserved matters — decisions needing unanimous or super-majority consent: new share issues, borrowing beyond a limit, changing the nature of the business, directors' pay.
• Confidentiality, restrictive covenants, dispute resolution and governing law — personal, contractual promises the articles were never meant to carry.

Common mistakes

1. Relying on the articles alone. A company may amend its articles by special resolution (Companies Act 2006, section 21), and a special resolution means a majority of not less than 75% (section 283) — so protection that lives only in the articles can usually be voted away without a minority's consent. The narrow exception is a provision for entrenchment under section 22, which can be put in place only on formation or by an amendment agreed to by all the members.
2. Not reading the variation clause. It is widely assumed a shareholders' agreement can never be changed without every signature. That is the default position for a contract, but plenty of agreements allow variation by a stated majority — so check what yours actually says before treating it as minority protection.
3. Contradicting the articles. Keep the two documents consistent, and say which prevails between the shareholders if they conflict.
4. Forgetting future shareholders. Without a deed of adherence, a later investor or an employee who receives shares is bound by none of it.
5. Treating it as one-and-done. An agreement signed by two founders rarely still fits after an investment round, a departure or a death.

England & Wales, Scotland and Northern Ireland

Company law here is genuinely UK-wide: except as otherwise provided, the provisions of the Companies Act 2006 extend to the whole of the United Kingdom (section 1299), so articles, special resolutions and Companies House filings work the same way in all three jurisdictions. The agreement itself is a contract, and that is where jurisdiction bites: Scotland is a separate legal jurisdiction with its own contract law and its own courts, and Northern Ireland has its own court system. State governing law and forum expressly rather than leaving either to be argued about later. Our template is drafted with England and Wales in mind.

Frequently asked questions

What governs shareholders if there is no shareholders' agreement?

Company law does not require a shareholders' agreement. Without one, the relationship is governed by the articles and general law — which is exactly why minority shareholders tend to want one.

What is the difference between a shareholders' agreement and the articles of association?

The articles are the company's public constitutional document, held on the register at Companies House; a shareholders' agreement is a private contract. A company may amend its articles by special resolution — a majority of not less than 75% — whereas a contract can be varied only in the way the contract itself allows, which is normally with every party's agreement.

When can a shareholders' agreement become public?

Rarely — it is usually not filed, and that privacy is one of its main attractions. The exception: under sections 29 and 30 of the Companies Act 2006, an agreement agreed to by all the members that would not have been effective unless passed as a special resolution must be sent to the registrar within 15 days — and once filed it is public. Compare the articles, where a copy of the amended articles must reach the registrar not later than 15 days after the amendment takes effect.

Do all shareholders have to sign it?

Only the people who sign are bound. Best practice is for every shareholder, and usually the company, to sign — and for anyone acquiring shares later to sign a deed of adherence.

Can a shareholders' agreement protect a minority shareholder?

It can, and that is one of the main reasons the document exists: reserved matters can give a minority a veto over key decisions, and tag-along rights protect them on a sale. Two cautions. It binds only those who sign it, and it can be varied however its own variation clause permits — so read that clause before relying on it. Separately, and whether or not an agreement exists, section 994 of the Companies Act 2006 allows a member to petition the court on the ground that the company's affairs are being conducted in a manner unfairly prejudicial to members' interests.

Statutory references on this page were checked against primary sources (legislation.gov.uk, GOV.UK, HSE, ICO and Acas) on 8 August 2026. Our templates themselves are not solicitor-drafted — see the note below.

This page is legal information, not legal advice.

Dogetlawyer is a Legal-Technology platform, not a law firm.

Our templates are not solicitor-drafted and have not been checked against primary sources. They are starting points to adapt, not finished documents.

This page describes the law of England and Wales unless it says otherwise. For anything significant, consider taking advice from a qualified professional.

A shareholders' agreement interacts with your company's articles, its share structure and often its tax position, so for a shareholding of real value, or a situation already in dispute, take professional advice before relying on any template.

How to get the template

The Shareholders' Agreement Template is one of around 114 free UK legal templates on Dogetlawyer, a Legal-Technology platform. Browse the A–Z index of free UK legal contract templates without an account; downloading needs a free account — registration, not payment.