Compliant with the Companies Act 2006
A shareholders agreement for private limited companies, covering share ownership, director appointments, decision-making, dividend policy, and exit provisions including drag-along and tag-along rights.
Shareholders agreements operate alongside a company's articles of association and are governed by the Companies Act 2006. Unlike articles of association, a shareholders agreement is a private document — it does not need to be filed at Companies House and can contain commercially sensitive provisions such as drag-along rights, tag-along rights, and pre-emption provisions. Changes to the Companies Act and ongoing reforms to company law mean shareholders agreements should be reviewed regularly.
A shareholders agreement is a private contract between some or all of the shareholders of a company, governing how the company is run, how shares are transferred, how decisions are made, and what happens when a shareholder exits. It supplements the articles of association.
You need a shareholders agreement when incorporating a company with co-founders, bringing on investors, or restructuring shareholdings. It is essential whenever more than one person holds shares — without it, disputes are governed entirely by the Companies Act 2006 defaults, which rarely reflect what the parties actually agreed.
Last updated: March 2026
The Companies Act 2006 provides a default framework for company governance, but shareholders are free to override many of its provisions by agreement. A shareholders agreement can restrict share transfers, require unanimous consent for key decisions, and create rights beyond those in the articles.
Yes. Unlike articles of association, a shareholders agreement does not need to be filed at Companies House and is not publicly available. This makes it the appropriate place for commercially sensitive arrangements.
A pre-emption right gives existing shareholders the right of first refusal when another shareholder wants to sell their shares. The Companies Act 2006 provides limited pre-emption rights on new share issuance, but pre-emption on transfer must be set out in the shareholders agreement or articles.
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1. COMPANY AND SHAREHOLDERS
This Agreement governs the relationship between the shareholders of [Company Name] (Company Number [XXXXXXXX]) and sets out their rights and obligations in relation to the Company.
2. BOARD OF DIRECTORS
The Company shall be managed by a Board of Directors. Each Shareholder holding 20% or more of the issued shares shall be entitled to appoint one director to the Board.
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OBLIGATIONS
ADDITIONAL TERMS
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