Contract templates · Business Setup & Ownership
A company's articles or bylaws cover the basics, but they rarely say what happens when a shareholder wants to sell to a stranger or an investor wants a veto. That is the job of a shareholders' agreement.
A shareholders' agreement is a private contract between a company's shareholders that governs board control, decisions needing shareholder approval, share transfers, new share issues and exits. It sits alongside the company's constitutional documents and is usually signed when a second shareholder or investor comes in.
When you need one
- A company has more than one shareholder
- Bringing in an investor or a new shareholder
Key clauses in a Shareholders' Agreement
These are the clauses the template includes, and what each one does for you.
Board and reserved matters
Sets board composition and lists reserved matters, such as new borrowing or selling the business, that need shareholder consent.
Pre-emption on new shares
Gives existing shareholders the first chance to buy new shares so their percentage is not diluted without notice.
Transfer restrictions and right of first refusal
Stops shares being sold to outsiders before the other shareholders have had a chance to buy them.
Drag-along and tag-along
Drag-along lets a majority force a full sale; tag-along lets minorities join a sale on the same terms.
Good and bad leaver
Decides what a departing employee-shareholder is paid for their shares depending on why they leave.
Dividend policy
States how and when profits are paid out rather than reinvested.
Deadlock resolution
Gives a route out of a stalemate, such as a chair's casting vote, escalation or a buy-sell mechanism.
Common mistakes to avoid
- Copying investor-style protections into a two-founder company where they only create friction.
- Leaving the agreement inconsistent with the articles or bylaws, which usually prevail.
- Not updating it after a new funding round.
How to use the template
Download the Word file
Buy the Shareholders' Agreement template on My Contract Lawyer and download the editable .docx straight after checkout.
Fill in the brackets
Add names, dates, fees, scope and governing law, and delete optional clauses that do not apply to your deal.
Check it against local law
Rules differ between US states, the UK and EU countries, especially for employment, consumer and property contracts. Have a lawyer review high-value or unusual deals.
Sign and keep a copy
Sign on paper or with any e-signature tool, and store the final version where both sides can find it.
Get the Shareholders' Agreement template
Lawyer-drafted and ready to edit in Word, Google Docs or Pages. One-time payment of $29, no subscription, instant download from My Contract Lawyer.
Frequently asked questions
Is a shareholders' agreement public?
No. Unlike articles of association, which are filed publicly in the UK, the shareholders' agreement is a private contract.
Does every shareholder need to sign?
Ideally yes. New shareholders are usually required to sign a deed of adherence agreeing to be bound.
What is the difference between drag-along and tag-along?
Drag-along protects the majority's ability to sell 100 percent of the company; tag-along protects minorities from being left behind with a new owner.
Related contract templates
Templates are a starting point, not legal advice, and using one does not create a lawyer-client relationship. Contract law differs between countries and states, so check the finished document against local law.