Shareholders' agreement: single majority owner retains control
It helps you to protect your rights against other shareholders and directors, prevents disputes, and clarifies the separate roles of stakeholders within the business.
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- Plain English makes editing easy
- Guidance notes included
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About this document
A shareholders agreement is an essential document to have in place. It takes over where company law stops - confirming the rights of the shareholders against one another and against other stakeholders in the business (particularly directors). It sets out how the shareholders intend the company should be operated.
This version is drawn for a situation where a single shareholder controls (and probably manages on a day to day basis) the business of the company. There is provision for the introduction of minority shareholders, but the largest shareholder remains firmly in control. Using a shareholder agreement is one of the most efficient ways of doing this.
Of course, one or more shareholders who control over 50% of the voting shares always control any company. This agreement enhances that position.
It also covers a situation where the largest shareholder may have transferred shares to several others, who collectively own more than he alone does. It minimises the opportunity for a takeover by several minority shareholders.
The document is suitable for companies of all sizes and in all industries.
It is drawn by a UK solicitor with experience of problems that can occur in the management of such company.
Note: It is important that the articles of association of the company permit and support this agreement. We offer several template sets. In particular, this one is likely to be suitable for a company with a majority owner.
No other shareholders’ agreements for sale on the Internet are so comprehensive in their cover of legal issues, and the drafting explanations and tips supplied. In many areas, we give you complete alternative paragraphs and explain in the notes when each will be the most suitable for you.
The provisions in this document are clear and can easily be edited or removed without affecting the remainder.
Examples of these are:
obligations of the company to the shareholders (the company is also a party to the agreement)
how shareholders will maintain their rights if they are not present at meetings
roles of directors and actions by the company or a director that require shareholders’ consent: controls and redistributes power between shareholders so that minority shareholders cannot club together to force certain decisions
new shareholder rights and restrictions: even if he is a trustee in bankruptcy
single director may delegate his or her powers
how to deal with new intellectual property
transfers of shares and rights of pre-emption or first refusal: when allowed, under what conditions and to whom
dividend policy and procedure
publicity about the deal
use of a shareholders own assets in the business
different valuation methodologies for the shares on the departure of a shareholder
This document was written by a solicitor for Net Lawman. It complies with current English law.
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