Shareholders agreement: new company; working directors

This shareholders agreement is suitable for shareholders of any type of trade or business.  It has been drawn for a situation where two or more shareholders are forming a new company to work together in any business. All are probably directors. Shareholdings may be different. One or more may work part time or not at all.

Shareholders' agreements set the ground rules for the relationship between shareholders. Mostly that means protecting the interests of one or more shareholders against the others. The directors operate a company and make the decisions, but the directors operate only in accordance with the instructions of the shareholders to whom they are accountable. Furthermore, to the extent that shareholders are also directors, they are bound to the terms of an agreement they have signed as a shareholder. So this means that it is really important to have a watertight shareholders agreement.

The document includes provision for valuation of the shares of a departing shareholder by reference to a valuation based on your instructions to an accountant. The valuation depends on the parameters used, so your instructions are critical. We have provided a comprehensive version which you can edit according to the deal you wish to strike with a selling shareholder.