Shareholders Agreement Lawyers for Australian Companies
Going into business with someone is easy on day one: everyone agrees, everyone’s optimistic, and nobody wants to talk about what happens if it sours.
A shareholders agreement is the document you have drafted while everyone is on the same page, so that money, control and exits are already settled if that ever changes.
What is a shareholders agreement?
It’s a contract between the owners of a company (and usually the company itself) that sets out how the company will really be run: who decides what, how shares can be bought and sold, what happens when someone wants out, and how deadlocks get broken. It works alongside your company constitution: we’ve written about why small businesses need a tailored constitution, and the two documents are designed together.
What should yours cover?
- Decision-making: which decisions need everyone, which need a majority, and which the directors handle day to day.
- Money: how funding works when the company needs more, and what happens when a shareholder won’t (or can’t) contribute.
- Shares and exits: pre-emptive rights, how a departing shareholder’s shares are valued and sold, and drag-along and tag-along rights (mechanisms that let a majority sell the whole company, or let minorities join a sale on the same terms).
- Founder commitments: vesting arrangements so a co-founder who leaves early doesn’t keep a full slice of everyone else’s future work.
- Deadlock and disputes: a clear path when 50/50 owners disagree, so the business doesn’t stall while the argument runs.
- Restraints: what a departing shareholder can and can’t do next.
When should you put one in place?
Ideally when the company is set up, alongside your company registration and constitution, or whenever a new shareholder comes in. In practice, the second-best time is now: these agreements are cheapest and easiest to negotiate before there’s a live disagreement to negotiate around. If you’re still choosing between structures, start with our business structure advice.
How does it work?
- Tell us about the company and its owners: who holds what, and how you want decisions and exits to work.
- Get a fixed fee quote upfront.
- We draft and explain: every clause in plain English, so all shareholders understand what they’re signing.
- Sign and store: usually within 5 working days per document.
Frequently asked questions
We’re 50/50 partners and get along well. Do we still need one?
You’re exactly who these agreements are for. A 50/50 company with no deadlock mechanism has no way to break a genuine disagreement, and the fallout can paralyse or destroy an otherwise healthy business. Agreeing the rules now costs a fraction of a dispute later.
Isn’t the company constitution enough?
They do different jobs. The constitution governs the company’s internal machinery; the shareholders agreement is a private contract between the owners covering the commercial deal: exits, valuations, funding obligations and restraints. Most small companies with more than one owner benefit from both, drafted to work together.
What about business partners who aren’t in a company?
If you’re in a partnership rather than a company, the equivalent document is a partnership agreement, and the same logic applies. We draft those too: start with our business structure page.
How much does a shareholders agreement cost?
A fixed fee, quoted upfront once we understand the ownership and what needs covering. The first consultation is free.
Settle the rules while everyone agrees
Tell us about your company and co-owners, and we’ll quote a fixed fee. Book a free consultation.
