- 1. The persons whose names and addresses are set out in part 1 of Schedule 1 (the “Shareholders”).
- 2. [Enter Company Name] Limited incorporated and registered in England and Wales with company number [Enter Company Number] whose registered office is [Enter Company Address] ("Company").
The date of this agreement is [Day] of [Month], 20[Year] (the “Signing Date”)
This is an agreement between:
- (A) The Company is a private company, which is able to issue shares. Some information about the Company is set out in Schedule 2.
- (B) The Shareholders own shares in the Company as set out in Schedule 2 and have agreed to conduct their relationship as shareholders on the terms set out in this agreement.
- The Board of Directors
- 3.1 The Company is to be managed by its Directors (the “Board”). The manner in which the directors are appointed or dismissed and the rules governing their conduct whilst they are members of the Board is described in this agreement and the additional rules of the Company known as the Articles of Association (the “Articles”).
- 3.2 The Shareholders shall each have the right to appoint [one/two] person[s] as [a] Director[s] and keep in office or remove and replace such individual[s]. Any person who has been appointed (which may be a Shareholder himself) shall be known as a “Founder Director”.
- 3.3 Appointment and removal of a Founder Director shall be notified to the Company in writing by the Shareholder who is seeking to make the change. A notice under this section shall become binding when it is delivered to the address of the Company which is provided in this agreement or at any meeting of the Board or committee thereof.
- 3.4 The parties intend that meetings of the Board are scheduled and held at least once every 3 months.
- 3.5 The Company shall send to the Directors (by email if necessary):
- 3.5.1 reasonable advance notice of each Board meeting;
- 3.5.2 a written agenda for each Board meeting, accompanied by all relevant papers; and
- 3.5.3 as soon as possible after each such meeting, a copy of the minutes of such meeting.
- 3.6 No binding decision may be made at a meeting of the Board, unless:
- 3.6.1 the nature of the business has been properly notified to all directors in advance; and
- 3.6.2 All of the Founder Directors are present at the meeting or the Shareholders have already agreed that the decisions referred to in the agenda shall be taken
- 3.7 The Directors may decide to delegate responsibility for specific tasks to a sub-committee on appropriate terms as they shall determine.
Accounting, Business Plan and Information Rights
Matters Requiring the Consent of all the Shareholders
Transfer of Shares
What Happens if a Party No Longer Owns Shares
Confidentiality and Announcements
Third Party Rights
Agreement Survives Completion
Shareholder Obligations and Status of this Agreement
What Happens if a Court Decides that One of the Terms of this Agreement Needs to be Deleted
Can the Agreement be Varied by Some or All of the Parties
Do All the Parties Need to Sign the Same Copy of the Agreement for it to be Binding
Governing Law and Jurisdiction
7 Necessary Documents You Need To Protect Your Business
Assuming you are setting up a limited company you really do need a shareholders’ agreement. This regulates the arrangements between you and your fellow shareholders. If there are other founders you need to agree and write down who owns the shares, and in what amounts. You also need to set out a framework for operating the company – who can make decisions and how do they get made. Don’t assume that just because everything is okay at the beginning, or you are all friends, that it’s going to be fine later. Remember how many bands have got into arguments when they split up, because there wasn’t an agreement saying who owned what. Remember how many rows there have been among songwriters who didn’t agree on the splits between them for that hit they wrote? Exactly. If you want your company to sound like sweet music then get this basic formality right...
Click here to download our Shareholder Agreement.
If somebody is investing or loaning money to your company they will want to see the terms written down. They will want to know what shares they get and what their value is, will they get diluted if more money comes in, procedures for running the company and exit, how much control they get. These issues are directly relevant to you as the entrepreneur too. Don’t just sign whatever is put in front of you. If you don’t pay attention to these details they will come back and bite you later.
Click here to download our Share Investment Agreement.
Website T's and C's
If you are running a website you need a collection of documents covering the way that the website is run. Consumers need to see these. Sometimes there are legal reasons, as with your policies on Data, or privacy, Cookies or cancellation policy. Sometimes it’s just good to set an expectation as to how you are going to behave and how you expect your customers to behave. Don’t just copy and paste someone else’s T’s and C’s. For example, Apple’s T’s and C’s may work well for a major global technology company, but they may not be appropriate at all for your small business. Take the time to create your own T’s and C’s which reflect the way that your business runs.
Click here to download our Terms and Conditions of Website Use.
If you are asking software developers to develop apps or websites or platforms for you then you must write things down. Some people say that software developers are the new builders – just like the people who make alterations to your house they are always running late, always going over budget and whatever happens it’s never their fault – they just blind you with construction science. Sound familiar? I would never be that unkind or simplistic about developers but it’s certainly the case that confusion and frustration can break out on all sides when there is no contract in place. What’s the price? When will it be paid? What are the development milestones? Who will own the software? Who will deal with bugs, changes and maintenance and at what cost? Your software may be a core component of your business – so it’s worth getting the paperwork right.
Click here to download our Software Development Agreement.
Employment or Consulting Agreement
Do you have people working with you? You need to write down the way that you are working with them. Employees now have a host of potential legal protections, e.g. in relation to process around termination, their data, disciplinary matters, and their pension rights. So you need to address that and other obligations in writing. And don’t assume that just because you call someone a “Consultant” in order to avoid all that stuff then that is what they are. The law and the taxman may still class them as an employee if effectively they are working full time only for you. Apart from these considerations you just need to be clear on the terms on which people work for and with you. What are they paid, when? Is there a bonus? How is it calculated? What hours of work do you expect? Do they get sick pay? What happens with holidays? If they leave what happens to their shares? And so on…
Click here to view our Employment Agreements.
Contract Partner Agreements
This next one is cheating a bit because contract partner agreements can take many forms. It may be a manufacturing agreement, distribution, e commerce, drop ship, agency or licensing agreement. Whoever you trade with you need a commercial contract that governs issues like price, payment terms, delivery standards for services and products, timetables, responsibilities, exclusivity, termination and so on. Without your customers and your cash you are nothing, so take the trouble to write it all down to give yourself some protection and peace of mind.
Click here to view our Partnership Agreements.
Your ideas, copyrights, patents, software and financial information are your private DNA. They make you unique and could help deliver unique value for you. But they could be cloned by someone else if you do not keep them secret. Other people like prospective investors, trade partners and purchasers often need to find out something more about you before they will deal with you – an NDA offers you some protection in relation to the information you disclose. You may not ever want to go through a court case to enforce it, but having a signed NDA is an expression of intent by both parties and a deterrent against disclosure of confidential information.
Click here to view our Confidentiality Agreements.
So those are the 7 types of agreement which all SMEs should be considering. You can find all of these legal documents on the Legal Documents page.
Hannah Ives is an experienced corporate and commercial lawyer who has worked in both private practice and in house. In private practice she has worked on public and private company transactions including company reorganisations, share and asset sales, refinancing, public offers and take privates.
More recently, Hannah was Head of Legal at Nord Anglia Education where she was responsible for the group’s legal activities both in the UK and overseas and worked on acquisitions, disposals, refinancing, restructuring, investments and also day to day matters such as tenders, commercial contracts and company secretarial matters.
Hannah is an English qualified solicitor but also has wide ranging experience of cross border transactions and has worked on legal matters in China, Russia, the UAE and various European jurisdictions. She has hands on experience of preparing businesses for sale from a legal perspective helping to achieve the best value for a business sale.