A shareholders agreement is the most important document your company will ever have. It governs what happens when shareholders disagree, want to exit, or face unforeseen circumstances.
Book a ConsultationThe Corporations Act provides a default framework for companies — but it is a blunt instrument that rarely reflects the specific commercial agreement between shareholders. A well-drafted shareholders agreement fills the gaps: it defines decision-making rights, protects minority shareholders, governs the transfer of shares, and provides clear mechanisms for resolving disputes.
At LK William, we draft shareholders agreements that are tailored to your specific company and shareholder relationships — protecting every party from the outset and providing clear, workable solutions for the difficult situations that inevitably arise.
Voting rights, reserved matters, and management decision-making
Share transfer restrictions — pre-emption rights, drag-along, tag-along
Buy-out provisions for exit, death, disability, and insolvency
Dividend policy and capital distribution mechanisms
Non-compete and non-solicitation clauses
Dispute resolution mechanisms
From shareholder goals to executed agreement.
We understand the commercial arrangement, the relative contributions of each shareholder, and the key risks each party wants to address.
We draft a shareholders agreement that reflects the agreed arrangement — covering decision-making, share transfers, exits, and disputes.
Each shareholder reviews the draft and we manage any negotiations to reach a final form that all parties are comfortable with.
We manage formal execution and advise on any related documents — such as constitution amendments or personal guarantees.
What happens when a shareholder wants to leave? Pre-emption rights (first right of refusal), drag-along clauses (majority can force minority to sell), and tag-along clauses (minority can join a sale) are essential tools for managing shareholder exits fairly and efficiently.
Certain decisions — taking on significant debt, entering new markets, issuing new shares — should require unanimous or supermajority approval. Reserved matters provisions ensure minority shareholders have meaningful protection against decisions that fundamentally affect their investment.
When equal shareholders cannot agree, the company can grind to a halt. A properly drafted deadlock resolution mechanism — whether mediation, an independent casting vote, or a buy-sell mechanism — provides a path forward when agreement cannot be reached.
Yes. A shareholders agreement is a binding contract between the shareholders of the company. It overrides the default provisions of the Corporations Act in many respects. However, it must be carefully drafted to be effective and to interact correctly with the company's constitution. We ensure the agreement and constitution work together seamlessly.
Without a shareholders agreement, the shares of a deceased shareholder may pass to their estate — potentially resulting in an unwanted third party becoming a shareholder. A well-drafted shareholders agreement addresses this scenario — providing for buy-out of the deceased's shares at a fair price, funded by life insurance or other arrangements.
Yes. A shareholders agreement can be amended with the agreement of all parties. However, amendments should be documented in writing and properly executed. As the company grows and circumstances change, it is important to review the agreement periodically and update it to reflect the current arrangements.
Book a confidential consultation with our team. No pressure, no legal jargon — just a clear conversation about your matter and how we can help.