Shareholders' Agreement for a Private Company Limited by Shares (LTD)

This document can be used by shareholders to agree on certain aspects of how a company will be run and can be used by any company incorporated in the UK. This document is not a legal requirement but can be used by an existing company, or a company which is yet to be incorporated. It can be modified to be used:

• for private limited companies with any type of share capital (e.g. multiple classes of shares)
• to contain provisions relating to loans, share issues, share transfers and guarantees
• to create voting blocks/pacts
• to agree dividend policy
• to agree directors, managing director and director salaries
• to create shareholder lock-in periods
• to create a right of pre-emption (a right of pre-emption refers to the right of first refusal. This means that the existing shareholders have the right to be offered shares up for sale first before they are offered to the public or other people).

A Private Company Limited by Shares is different from operating a business as a sole trader or a member of a partnership as it is a legal entity in its own right, meaning it is viewed as a separate entity from its owners, i.e. shareholders. This document should be viewed alongside the company's Articles of Association.

How this document is to be used

Any separate agreements relating to loans, transfers or guarantees which are referenced within the document and incorporated into the contract should be attached.

Where there are multiple classes of shares, multiple shareholders, share issues or transfers, the appendices to the document should be completed with the relevant details of the share capital prior to the agreement, any issues and/or transfers, and the share capital following the agreement.

Then each party should be given a copy of the document so that they can read it. If each party is happy with the agreement it should then signed by each, with such signature being witnessed by an independent person. The witness can be any independent person who is 18 years of age or older. Ideally, this person should be a neutral person (i.e. someone who is not related to any of the parties and does not benefit from the agreement). The same person can act as a witness for all the parties, or multiple witnesses can be used. If one witness is used, they must make sure they meet all the criteria in relation to all parties involved (i.e., an independent person with no relation to any party and no benefit from the agreement).

Any Applicable Law

Companies Act 2006

Help from a lawyer

You can choose to consult a lawyer if you need help.

The lawyer can answer your questions or help you through the process. You will be offered this option when you complete the document.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.