Shareholder Agreements

Shareholder agreements help business owners avoid uncertainty over some of the most important issues a company will face. They can establish what happens if a shareholder wants to leave, how major decisions are made, whether shares can be transferred, and what rights exist if new investors join the business.

Our corporate law specialists advise on shareholder agreements that reduce the risk of disputes and establish clear arrangements for the future. Quite simply, our goal is to help protect our client’s interests. We advise founders, owner-managed businesses, family companies, investors, majority shareholders, and minority shareholders.

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Corporate & Commercial Lawyers in London, Sussex & Surrey

LONDON: 020 4524 9436 | SUSSEX: 01273 956 270 | SURREY: 01252 471 211

Protecting shareholders & planning for the future

As part of our services, we advise on a wide range of related matters, including:

Shareholder rights
Minority shareholder protection
Decision-making and deadlock
Future investment
Share transfers
Reserved matters and shareholder consent rights
Dividend policies and funding obligations
Drag-along and tag-along rights
Good leaver and bad leaver provisions
Confidentiality, restrictive covenants, and non-compete protections
Articles of association and company constitutional documents
Investor protections and founder rights

Shareholder Exits

A shareholder leaving a business can create uncertainty for everyone involved, particularly where there is no agreement on what happens to their shares. Questions around valuation, timing, and ownership can quickly become a source of disagreement.

We advise on arrangements that deal with shareholder departures before they become an issue, helping businesses establish a clear process that protects both the company and the remaining shareholders. This may include:

Compulsory transfer provisions
Valuation mechanisms
Payment terms
Leaver provisions
Death or incapacity arrangements
Restrictions on selling shares to third parties
Clear exit provisions
Business continuity
Shareholder disputes

Minority Shareholder Protection

Minority shareholders often invest significant time and money into a business without having control over key decisions. A shareholder agreement can provide additional protections beyond those available under company law, giving minority shareholders greater involvement in important matters. This can be particularly important where a minority shareholder is also a founder, investor, director, or key contributor to the company’s growth.

We help businesses strike an appropriate balance between protecting minority interests and allowing the company to operate efficiently.

Decision-Making & Deadlock

Disagreements between shareholders are not uncommon, particularly as a business grows or circumstances change. However, without a clear process for dealing with them, even relatively straightforward decisions can become difficult to resolve.

A shareholder agreement can establish how important decisions are made and what happens if shareholders are unable to reach agreement, reducing the risk of disputes affecting the wider business. We advise on:

Reserved matters
Voting thresholds
Board approval requirements
Escalation procedures
Mediation
Buy-sell mechanisms
Chairman’s casting vote
Agreed exit processes

These provisions can help maintain stability and provide a clear route forward if a deadlock arises.

Future Investment

Investors often want clarity around how a business is managed and what protections are in place if ownership changes in the future. At the same time, existing shareholders may wish to ensure that future investment does not affect their position unexpectedly.

We advise businesses on shareholder arrangements that support future investment while providing certainty for both founders and investors. This can include:

Pre-emption rights
Anti-dilution provisions
Investor consent rights
Information rights
Funding obligations
New share issues
Preference shares
Founder and investor share rights

Share Transfers & Business Sales

Ownership structures rarely remain static. A shareholder may wish to retire, sell their shares, transfer ownership to family members, or perhaps accept an offer from a third party. Without clear transfer provisions, uncertainty can arise over who may acquire shares, how shares should be valued, and whether other shareholders have the right to participate in or block a proposed sale.

We advise on provisions that regulate future transfers and sales, helping businesses maintain greater control over ownership while ensuring shareholders understand their rights and obligations if circumstances change.

Our Corporate & Commercial Team

Jeremy Saideman

Carl Robinson

R

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