Shareholders' Agreement for a Private Company Limited by Shares (LTD) - Word & PDF Template Form Pro · UK-law

SHAREHOLDERS' AGREEMENT

relating to a Private Company Limited by Shares

THIS DEED is made on ________

§ 1. PARTIES

This Agreement is made between the following parties:

(A) ________ of:

________

(B) ________ of:

________

(together called the 'Shareholders' and individually a 'Shareholder').

NOW THIS DEED WITNESSES and the Shareholders HEREBY AGREE as follows:

§ 2. SHARE CAPITAL

2.1 ________ LIMITED is a private company limited by shares incorporated in England and Wales under the Companies Act 2006 with company number ________ (the 'Company'), with its registered office at:

________

2.2 The Company has an issued share capital of ________ ordinary shares of £________ each, owned immediately prior to completion of this Agreement in the following proportions:

(I) ________ — ________ shares

(II) ________ — ________ shares

§ 3. ISSUE OF SHARES

3.1 Within 14 days of the date of this Agreement (or such other day as the Shareholders agree) each Shareholder shall deliver to the Company:

(I) a letter of application in the form set out in the Schedule entitled 'Application for Issue of Shares' for the issue to them at par value of the number of shares set out in the Schedule entitled 'Agreed Issue of Shares'; and

(II) a cheque payable to the Company for, or electronic transfer of, the subscription money due in respect of the shares applied for, or, where the shares are issued in return for assets provided by the Shareholder as specified in the Schedule entitled 'Agreed Issue of Shares', the applicable contract, deed or other legal document transferring title in the said asset to the Company.

3.2 The allotment and issue of shares pursuant to this clause shall be effected in accordance with the Company's articles of association and the Companies Act 2006, and the directors shall be authorised to allot the relevant shares accordingly.

3.3 If any Shareholder fails to apply and pay for, or transfer relevant assets in respect of, their shares as specified in this clause, they shall be in default of this Agreement and any non-defaulting Shareholder shall be entitled to terminate this Agreement.

3.4 If the Company fails to issue and register shares to any Shareholder, any Shareholder shall be entitled to terminate this Agreement.

§ 4. TRANSFER OF SHARES

4.1 Within 14 days of the date of this Agreement (or such other day as the Shareholders agree) the Shareholders (the 'Transactors') will effect the following sale of shares (the 'Sales'):

________

4.2 Within 14 days (or such other day as the Shareholders agree) of the Sales having been completed, the Transactors will execute a stock transfer form in respect of the relevant shares, account for any stamp duty payable, notify the Company of the change in ownership of the shares sold and request that the transfers be registered accordingly.

4.3 If the Company fails to register the transfer of any shares, any Shareholder shall be entitled to terminate this Agreement.

§ 5. SHARE CAPITAL AFTER EXECUTION OF THIS AGREEMENT

Following the execution of the transfers and issue of capital to be effected in accordance with this Agreement, the Company's share capital will be owned in the proportions set out in the Schedule entitled 'Share Capital After Execution of this Agreement'.

§ 6. DIRECTORS

6.1 ________ shall be entitled under this Agreement to remain managing director of the Company for so long as they remain the beneficial owner and registered holder of shares in the Company. They shall exercise the normal functions and have the normal responsibilities of such office, including the day-to-day conduct of the management and affairs of the Company, subject only to the directions of the board of directors of the Company and to the provisions of this Agreement and the general duties owed by directors under sections 171 to 177 of the Companies Act 2006.

6.2 The Shareholders shall continue to support any Shareholder named in this clause to be or remain a director or managing director (and shall oppose their removal) unless and until:

(I) they have ceased to comply with the shareholding qualification referred to above;

(II) they are in material breach of this Agreement;

(III) they are guilty of conduct justifying their summary dismissal at common law; or

(IV) their employment with the Company is otherwise terminated in accordance with their terms of employment with the Company.

6.3 The Shareholders agree that they will support the position that there shall be no more than ________ director(s) of the Company at any time.

§ 7. VOTING

7.1 Save as otherwise expressly provided in this Agreement, each Shareholder shall exercise their voting rights within the Company independently and with full individual autonomy, as they see fit.

§ 8. LOANS

8.1 Within 14 days of the date of this Agreement (or such other day as the Shareholders agree), any Shareholders who are parties to the loan agreement (if any) attached at ________ will make loans to the Company in accordance with the terms of that agreement.

§ 9. GUARANTEE

9.1 Within 14 days of the date of this Agreement (or such other day as the Shareholders agree), any Shareholders who are parties to the guarantee agreement (if any) attached at ________ will provide guarantees to the Company in accordance with the terms of that agreement.

§ 10. DIVIDENDS

10.1 Subject to the Company having distributable profits available for the purpose within the meaning of Part 23 of the Companies Act 2006, and to the directors recommending the same, the Shareholders shall distribute dividends in proportion to their respective shareholdings. Dividends shall be considered for distribution annually.

§ 11. DIRECTORS' SALARY

11.1 The Shareholders shall support the following directors being paid the following amounts as salary by the Company:

________

§ 12. CONFIDENTIALITY

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§ 13. NON-COMPETE

13.1 Each Shareholder agrees that, for the duration of this Agreement and for a period of ________ thereafter, they shall not, directly or indirectly, within ________, engage in any business or project that competes with the activities carried on by the Company, or which is substantially similar to those undertaken by the Company.

13.2 This restriction includes, but is not limited to, starting, investing in, or participating as an employee, consultant or adviser in any such competing business or project.

13.3 The Shareholders agree that the restrictions in this clause are reasonable and necessary to protect the legitimate business interests of the Company. If any such restriction is held to be void but would be valid if some part of it were deleted or its scope reduced, the restriction shall apply with such modification as may be necessary to make it valid and effective.

§ 14. LOCK-IN

14.1 No Shareholder may transfer any of the shares in the Company held by them within ________ of the date of this Agreement, either to another Shareholder or to any other party, without the prior written consent of all the other Shareholders.

§ 15. PRE-EMPTION

15.1 A Shareholder ('Seller') wishing to sell or transfer shares ('the Sale Shares') shall give notice in writing ('the Sale Notice') to the other Shareholders ('the Buyers') stating the proposed price for the Sale Shares and the identity of the proposed buyer.

15.2 Within 28 days of service of the Sale Notice, a majority of the Buyers shall give notice ('the Counter-notice') stating whether or not they accept the proposed sale to the proposed buyer; and if they are unwilling to accept the proposed buyer as a new member of the Company, then the sale to that person shall not proceed.

15.3 If the Buyers state in the Counter-notice that they are prepared to buy the Sale Shares, then the Seller shall be obliged to sell the Sale Shares to the Buyers at the price specified.

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15.5 The Buyers shall notify the Company that they require the Company's auditors to determine the fair value within 28 days of the Counter-notice. The auditors shall act as experts and not as arbitrators and their determination shall, save in the case of manifest error, be final and binding on the parties.

§ 16. INTERPRETATION

16.1 In this Agreement, where any party is required to 'support' a proposal or position, that requires them to exercise any powers and/or votes as shareholders or directors so as to enact such proposal or position, and not to oppose or fail to support any such proposal or position.

16.2 This Agreement represents the entire agreement between the parties and each Shareholder acknowledges that, save as herein provided, they have not entered into this Agreement in reliance upon any representation, express or implied, written or oral.

16.3 As between the Shareholders, the terms of this Agreement shall prevail over the provisions of the articles of association of the Company; and whenever any difference is identified, the Shareholders shall introduce and support all necessary resolutions to amend the provisions of the articles so that such difference ceases to be of any effect.

16.4 No variation of this Agreement shall be effective unless made in writing and signed by or on behalf of each of the parties.

16.5 If any provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable; and if such modification is not possible, the relevant provision shall be deemed deleted without affecting the validity of the remainder of this Agreement.

16.6 A person who is not a party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

§ 17. TERMINATION

17.1 This Agreement shall terminate (without prejudice to any rights or liabilities which have accrued prior to such termination) on the occurrence of any of the following events:

(A) the Shareholders agreeing in writing to terminate this Agreement;

(B) an effective resolution being passed or an order being made for the winding up of the Company (other than for the purposes of a solvent reconstruction or amalgamation);

(C) only one Shareholder remaining as the beneficial owner and registered holder of shares in the Company; or

(D) the occurrence of any event entitling a Shareholder to terminate this Agreement as set out elsewhere in this Agreement.

17.2 The provisions of clauses 12 (Confidentiality), 13 (Non-Compete), 18 (Notices) and 19 (Governing Law and Jurisdiction) shall survive termination of this Agreement.

§ 18. NOTICES

18.1 Any notice to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered by hand, or sent by pre-paid first class post, to the relevant party at the address set out in this Agreement (or such other address as the party may notify in writing from time to time).

18.2 Any such notice shall be deemed to have been received: if delivered by hand, at the time of delivery; and if sent by pre-paid first class post, on the second business day after the date of posting.

§ 19. GOVERNING LAW AND JURISDICTION

19.1 This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it, its subject matter or formation shall be governed by, and construed in accordance with, the laws of England and Wales.

19.2 The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this Agreement, its subject matter or formation.

IN WITNESS WHEREOF this Agreement has been executed as a deed and is delivered on the date stated at the beginning of this document.

EXECUTED AS A DEED by ________ in the presence of:

_____________________________________
Signature of ________

_____________________________________
Date

_____________________________________
Signature of Witness

_____________________________________
Name of Witness (BLOCK CAPITALS)

Address of Witness: _____________________

_____________________________________

_____________________________________

_____________________________________

Occupation of Witness: _____________________

EXECUTED AS A DEED by ________ in the presence of:

_____________________________________
Signature of ________

_____________________________________
Date

_____________________________________
Signature of Witness

_____________________________________
Name of Witness (BLOCK CAPITALS)

Address of Witness: _____________________

_____________________________________

_____________________________________

_____________________________________

Occupation of Witness: _____________________

Schedule A — Application for Issue of Shares

The Directors
________ Limited
________

Dear Sirs,

________ Limited (the 'Company')

I hereby apply for ________ shares in the capital of the Company for cash on the basis of £________ per share and request you to register the shares in my name. I enclose a cheque for, or have transferred, the sum of £________ in respect of the said shares.

I acknowledge that my application is made on the basis that I will hold any such shares allotted to me subject to the articles of association of the Company.

Yours faithfully,

...........................................

(Applicant Name) ________

Dated ________

Schedule B — Agreed Issue of Shares

Please detail the agreed issue of shares, including details of each person to whom shares are being issued and the number of shares of each class to be issued to them.

________

Schedule C — Share Capital After Execution of this Agreement

Please detail the future ownership of the Company, including details of each owner and the number of shares of each class that they will own following any issue/transfer of shares to be carried out following this Agreement.

________