BEFORE YOU SIGN A shareholder AGREEMENT

A shareholder agreement is the document nobody reads until the day it decides everything. Read it now — while everyone is still friends.

Your articles of association are public and mostly standard. They tell the outside world how the company is run. The shareholder agreement is private, and it tells the owners how they will behave towards each other — who decides, who can leave, and what happens to their shares if they do.

Most founders sign one in the first weeks, in a hurry, from a template. It sits in a drawer for years. Then an investor arrives, a co-founder wants out, or two directors stop speaking — and every word suddenly matters.

Everything else in the agreement is housekeeping. These six provisions decide who holds the power when it counts.

1. 01RESERVED MATTERSThe list of decisions that need every shareholder — or a supermajority — to agree.
2. 02DEADLOCKWhat happens when two equal owners cannot agree: mediation, a casting vote, or a buy-out.
3. 03LEAVER PROVISIONSGood leaver, bad leaver — and what each one is paid for their shares.
4. 04PRE-EMPTIONWho gets first refusal when shares are issued or sold, and on what timetable.
5. 05DRAG & TAGWhether a majority can force a sale — and whether a minority can join one.
6. 06RESTRICTIVE COVENANTSHow long, and how far, a departing shareholder is kept from competing.

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The best time to agree how you will disagree is before you ever have to.

Run through these with your co-founders before anyone picks up a pen. If you cannot answer one of them, the agreement probably does not either.

A review of an existing agreement takes us about a week and is almost always a fixed fee. We will tell you plainly which clauses protect you, which ones do not, and what is worth renegotiating while relations are still good.