Clear agreements between business owners are essential to protecting relationships, business value and long-term stability.
Our Corporate team specialises in drafting bespoke shareholders’ and partnership agreements tailored to the realities of how businesses and partnerships operate.
Whether you are setting up a new venture or formalising arrangements within an existing business, we provide practical, forward-thinking advice designed to avoid disputes and protect your interests.
What is a shareholders agreement?
A shareholders agreement is a private contract between the shareholders of a company that governs how the company is owned, managed and controlled. It sits alongside the company’s articles of association and allows shareholders to agree matters not visible on the public register. A well-drafted shareholders’ agreement provides certainty from the outset and protects relationships if circumstances change.
A shareholders agreement is strongly recommended where:
- There is more than one shareholder
- Shareholders have unequal investment or responsibilities
- Family members or friends are in business together
- External investors are involved
- There are working and non-working shareholders
- The business is expected to grow, take on investment, or be sold.
Putting an agreement in place early is almost always simpler and more cost-effective than trying to agree terms once a dispute has arisen.
What can go wrong without one?
Without a shareholders agreement, the company is governed primarily by company law and the articles of association, which are often generic and are often not designed to deal with real business issues. Common problems include:
- Deadlock between shareholders
- Disputes over decision-making and control
- Shareholders leaving without a clear exit mechanism
- Shares being transferred to unwanted third parties
- Disagreements over dividends or reinvestment
- Minority shareholders feeling unprotected.
A bespoke shareholders’ agreement helps prevent disputes rather than resolving them after the damage is done.
Our approach
We also advise on share structure from the outset, including the appropriate number of shares to issue, share classes, and voting rights. Getting this right initially can save time, complexity and unnecessary cost later.
Our shareholders’ agreements typically cover:
- Share ownership and voting rights
- Board composition and decision-making
- Reserved matters
- Dividend policy
- Transfer of shares and exit provisions
- Leaver provisions
- Drag-along and tag-along rights
- Deadlock resolution
- Confidentiality and restrictive covenants.
What is a partnership agreement?
A partnership agreement governs the relationship between individuals or entities carrying on business together, either as a general partnership or limited liability partnership (LLP). Without a written agreement, partnerships are governed by default legislation, which is often unsuitable for modern businesses. A properly drafted agreement provides clarity and reduces the risk of disputes. A partnership agreement is essential where:
- Two or more individuals are trading together
- There is an LLP structure
- Partners contribute unequally
- Profits and responsibilities differ
- The partnership is expected to grow or change.
Risks of operating without one
Without a partnership agreement:
- Profits may be shared equally regardless of contribution
- Automatic dissolution can occur on a partner leaving or dying
- Disputes may arise over decision-making authority
- Partner responsibilities may be unclear.
These issues can easily avoided if you have a bespoke partnership agreement.
Our approach
We draft partnership and LLP agreements that reflect the commercial reality of the business, covering:
- Capital contributions and profit sharing
- Management and decision-making
- Partner duties and restrictions
- Admission and exit of partners
- Retirement, expulsion and dissolution
- Confidentiality and restrictive covenants.
Case study: Shareholders agreement
We assisted a growing owner-managed business with shareholders holding different roles, investment levels and long term objectives.
Our approach:
- Understand the business and shareholder dynamics
- Identify potential future disputes or pressure points
- Draft a bespoke shareholders’ agreement aligned with the company’s articles
- Introduce clear exit mechanisms and minority protections.
Client testimonial
“The agreement was clearly drafted with our business in mind. The process highlighted issues we hadn’t considered and gave us confidence that everyone knew where they stood.” Director and shareholder
Case study: Formalising a long-standing partnership
We worked with a long-established partnership operating successfully without a written agreement. As the business grew, formal arrangements became essential.
Our approach
- Review the existing partnership arrangements
- Draft a bespoke partnership agreement reflecting partner contributions, responsibilities, and exit arrangements
- Provide practical guidance on governance and decision-making.
Client Testimonial
“We wish we had done this years ago. Everything is now clear, fair and documented properly.” Partner
FAQs: Shareholder and Partnership Agreements
Below we answer some frequently asked questions about shareholder and partnership agreements that our Corporate and Commercial team get asked.Do I have to have a shareholders or partnership agreement?
Can I change an agreement once it is in place?
Can a shareholders agreement override the company’s articles?
What happens if a partner or shareholder leaves without an agreement?
Are these agreements legally enforceable?
Can an agreement deal with future investors?
Do I need a solicitor to draft one?
How long does it take to draft?
How much will it cost?
Can this cover disputes or deadlocks?
Find out more about the team
