Shareholders' agreement

Professional investors
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This document includes terms that a professional investor such as a business angel or venture capitalist would require.It also considers the provisions of minority shareholders - likely to be the founders and early supporters.Additional terms in this document include: drag along and tag along rights, key man insurance, rights of preference, rights of first offer, and increased reporting requirements.
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  • Length:27 pages (9300 words)
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About this document

This template is drawn specifically to cover the situation where an external investor introduces money. The transaction is likely to be a loan agreement, supported by a shareholding.

The smaller the proportion of shares, the more important this agreement becomes. It protects and empowers the investor in ways that are fair and that reflect the fact that he, she or it may not be involved in the day to day operation of the business. However, the option of board representation is provided.

This version is also suitable for a situation where the investor has a voting majority but prefers to stay away from day to day management. Other shareholders, who may include the company founders, are not prejudiced.

This agreement is:

  • suitable for private companies in any industry
  • with any number of shareholders
  • suitable for all stages of the business/investment lifecycle, whether the investor is providing seed capital, venture capital, expansion capital or a MBO
  • the company could be a start-up or established

The agreement is not affected by use of different classes of shares, the terms of any loan agreement, use of options, or other structure. Ideally, where a large investment is being made, this agreement would be drawn alongside the other legal documents, such as lending agreements that deal with the investment so that it is in place as soon as the transaction completes.

Note: It is important that the constitution of the company are in terms which permit and support this agreement.


There are specific provisions in this agreement that are not included in other Net Lawman shareholders’ agreements that a business angel or venture capitalist is likely to require. It considers minority shareholders such as company founders still working in the business

Examples are the inclusion of procedure to deal if deadlock occurs, increased reporting and information rights, drag along and tag along rights, and provisions to protect shareholders from dilution of their investment at subsequent financing rounds such as right of first offer.

Standard terms, such as those setting out responsibilities of the directors and the company to shareholders, are of course included.

In many areas, we give you complete alternative paragraphs and explain in the notes when each will be the most suitable for you.

The paragraphs in this document include:

  • Appointment of directors
  • Responsibility of directors
  • Proxy voting of shareholders at meetings
  • Company's obligations to the shareholders
  • Additional disclosure and access to information for the investor(s)
  • Assets introduced by shareholders
  • Intellectual property introduced by shareholders
  • Actions requiring shareholder consent
  • Deadlock
  • Transfers conditionally permitted
  • Assets and intellectual property introduced by the investor
  • Tag along right
  • Drag along right
  • Transfers on death or incapacity
  • Limitation of actions by former shareholder
  • Dividend policy and procedure
  • Continuing obligations of shareholders
  • Publicity
  • Conflict with the Articles of Association
  • Confidentiality
Reviews of this document
4.9 out of 5 stars
7 Reviews
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Recent reviews
15 October 2023
Initially I was not sure how relevant it would be to New Zealand Companies Act law, however its been spot on.
It is a very cost effective way to get a full comprehension of what is required and what to be careful of even if you don't use the document; the information and explanation is invaluable.
Explanation of what each section is for and how to use is good but could still be further improved.
The benefit personally and for the company has been great.
I highly recommend this to start-up companies and others.
My final recommendation to Netlawman is to create a pack of documents for various start-up companies to help navigate all the stuff needed.
Shareholder Agreement
Directors Service agreement
and bundle these into a pack....;)
Justin Post
Review of the New Zealand version
09 June 2020
Great easy to use document
John Voitin
Review of the Australian version
12 August 2019
The document has very clear wording, logical composition, is easy to navigate.
Valeriia Chupina
Review of the United Kingdom version
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