Private company template
Founders, co-founders, and investors
SHAREHOLDER AGREEMENT
Corporate Governance, Equity Ownership & Transfer Rules
Legal
Shareholder Agreement Template
Set out how a company's shareholders will work together with an agreement covering ownership, decisions, share transfers, and exits in one clear document for all parties.
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This Shareholder Agreement is entered into by and among the Corporation and the shareholders listed above. It sets the rules for governance, equity ownership, transfers, distributions, loan repayment priority, liquidation, and dispute resolution.
Clause 1. Purpose of agreement
The Shareholders acknowledge that they constitute all current equity holders of the Corporation and, to the extent applicable from time to time, may also serve as Directors, Officers, employees, or advisors of the Corporation. This Agreement is intended to regulate management control, preserve continuity of ownership, define approval rights, establish restrictions on the transfer of shares, govern distributions, and determine the allocation of assets if the Corporation is wound up or liquidated.
Clause 2. Shares and capital structure
The parties represent that the shares listed below constitute 100% of the issued and outstanding capital stock of the Corporation as of the effective date, unless amended by a written instrument signed in accordance with this Agreement. All shares identified below shall be deemed fully paid and non-assessable.
Shareholder name | Class of stock | Number of shares | Ownership percentage (%) |
Alex Morgan | Common Stock | 4,000 | 40 |
Jordan Lee | Common Stock | 3,000 | 30 |
Casey Rivera | Common Stock | 2,000 | 20 |
Taylor Brooks | Common Stock | 1,000 | 10 |
- No Shareholder may claim ownership rights inconsistent with the Corporation's stock ledger and duly adopted resolutions.
- Any future issuance, reclassification, redemption, option grant, warrant, convertible security, or recapitalization must comply with this Agreement and the governing law of Delaware.
- If there is any conflict between informal side arrangements and this Agreement, this Agreement controls unless a later written amendment is approved as required under Clause 3.
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Clause 3. Management, board authority, and unanimous consent
The business and affairs of the Corporation shall be managed under the direction of its Board of Directors, except for matters expressly reserved to the Shareholders under this Agreement, the Articles of Incorporation, the Bylaws, or applicable law. Unless otherwise required, each Shareholder shall maintain a seat on the Board of Directors for so long as that Shareholder continues to hold shares and remains eligible under applicable law and the governing documents.
Board composition and ordinary authority
- The Board may approve annual operating budgets, ordinary-course contracts, banking arrangements, employment decisions, and capital expenditures that fall within an approved budget.
- The Board shall keep complete books and records, maintain proper minutes, and present financial statements to the Shareholders on a periodic basis determined by Board resolution.
- Board action may be taken at duly called meetings or by written consent as permitted by law and the governing corporate documents.
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Officer roles and duties
President
Has primary responsibility for day-to-day management, strategic execution, and implementation of Board-approved plans.
Vice President
Supports the President and performs delegated operational, commercial, or functional duties authorized by the Board.
Treasurer
Oversees financial controls, accounting coordination, treasury administration, and reporting on cash, debt, and reserves.
Secretary
Maintains corporate records, minutes, notices, stock records, and compliance with formal governance procedures.
Matters requiring unanimous shareholder approval
- Any merger, acquisition, consolidation, or similar business combination involving the Corporation.
- Any amendment, repeal, or restatement of the Articles of Incorporation or Bylaws.
- Any issuance of new shares, options, warrants, phantom equity, convertible debt, SAFE instruments, or other securities that may dilute existing ownership.
- Any transfer, lease, exclusive license, pledge, or sale of all or substantially all of the Corporation's assets.
- Any voluntary dissolution, liquidation, winding up, or filing for insolvency protection, except where required by law.
- Any amendment of this Agreement, except where a different threshold is expressly stated in a particular clause.
If a Shareholder is employed by the Corporation, compensation, bonus arrangements, benefits, restrictive covenants, and termination rights may be set out in a separate employment or services agreement approved by the Board. Any salary increase, material bonus arrangement, severance obligation, or related-party employment term outside ordinary-course policy shall require Board approval and, if material, unanimous Shareholder approval.
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Clause 4. Non-competition and trade secrets
During the period in which a Shareholder owns any equity interest in the Corporation, that Shareholder shall not, directly or indirectly, own, manage, operate, control, finance, consult for, or hold a material economic interest in any business that competes with the Corporation within the scope of the Corporation's then-current business activities, except for passive investments of less than 5% in publicly traded securities or as otherwise unanimously approved in writing by the Shareholders.
- Each Shareholder shall protect all confidential and proprietary information of the Corporation, including customer lists, pricing data, business plans, source code, software architecture, product specifications, technical documentation, trade secrets, inventions, research, processes, supplier data, and other non-public information.
- The confidentiality obligation survives any resignation, termination of employment, transfer of shares, redemption, repurchase, retirement, or other cessation of relationship with the Corporation.
- No Shareholder may use confidential information except for the benefit of the Corporation and in performance of authorized duties.
Clause 5. Distributions and shareholder loans
Net income shall be determined on an accrual basis in accordance with the accounting methods consistently applied by the Corporation. Before declaring any dividend or other equity distribution, the Board shall determine whether the Corporation has maintained a retained reserve of at least $50,000 for working capital, contingencies, debt service, and operational expansion.
Reserve threshold
No distribution is required if the Board determines that retaining at least $50,000 is reasonably necessary for operations, growth, or solvency.
Quarterly distributions
Subject to law and available surplus, declared distributions shall be made pro rata in proportion to share ownership.
Shareholder loans
Any loan by a Shareholder to the Corporation must be documented, approved by the Board, and carry terms disclosed to all Shareholders.
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Clause 6. Dissolution and liquidation waterfall
The Corporation may not voluntarily dissolve, wind up, or liquidate without the unanimous written consent of all Shareholders unless a mandatory dissolution event occurs under applicable law. Upon liquidation, winding up, or sale of substantially all assets followed by distribution, the assets of the Corporation shall be applied in the order of priority set out below.
Priority level | Liquidation recipient / obligation |
1st Priority | Third-party creditors, legal liabilities, and liquidation expenses |
2nd Priority | Outstanding Shareholder Loans, including principal and unpaid interest |
3rd Priority | Undistributed net profits and declared but unpaid dividends |
4th Priority | Repayment of share purchase prices paid by original Shareholders, to the extent lawfully permitted and supported by available proceeds |
5th Priority | Residual assets distributed pro rata according to share percentage |
- The Corporation shall first satisfy or make adequate provision for all lawful debts, obligations, taxes, employee liabilities, and expenses of winding up.
- If liquidation proceeds are insufficient to satisfy any tier in full, the available amount for that tier shall be allocated ratably among the claimants in that tier, and no lower tier shall receive any distribution until the prior tier is satisfied or exhausted.
- Nothing in this Clause modifies any liquidation preference, senior security, or creditor right validly approved in accordance with Clause 3 and applicable law.
Clause 7. Restrictions on share transfers and buy-sell provisions
Each Shareholder represents that the shares held by that Shareholder are being acquired and held for investment and not with a view to immediate public resale or distribution in violation of applicable securities laws. No Shareholder may sell, assign, transfer, pledge, encumber, gift, or otherwise dispose of any shares except in strict compliance with this Agreement and applicable law.
Mandatory repurchase event
Upon the death or legal incapacity of a Shareholder, the Corporation shall have the first obligation to repurchase that Shareholder's shares within 60 days after the appointment of the applicable legal representative or guardian, subject to valuation and legal-transfer requirements.
Voluntary transfer notice
A Shareholder wishing to transfer shares must deliver at least 60 days' prior written notice stating the number of shares, proposed price, material terms, and identity of the proposed transferee.
Right of first refusal
The remaining Shareholders shall have a 10-day prior notice right to purchase all, but not less than all, of the offered shares on the same material terms before any transfer to an outside party may occur.
Permitted outside transfer
If the ROFR is not exercised in full within the stated period, the transferring Shareholder may complete the proposed outside transfer on terms no more favorable than those offered to the remaining Shareholders.
Valuation and purchase mechanics
- Unless the Shareholders unanimously agree otherwise, the purchase price for a mandatory or voluntary buy-sell event shall be determined by the last written valuation formula or appraisal method approved by the Shareholders. If no method is in force, the parties shall appoint an independent appraiser experienced in private-company valuations.
- Closing of a purchase under this Clause shall occur on the date stated in the election notice or, if later, on the earliest date when all legal-transfer conditions have been satisfied.
- The Corporation may assign all or part of its purchase right to one or more remaining Shareholders if permitted by law and if the assignment is made on the same material terms.
As a condition to any permitted transfer, the transferee shall execute a joinder agreeing to be bound by this Agreement before the Corporation recognizes the transfer.
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Clause 8. Dispute resolution
Any controversy, claim, or dispute arising out of or relating to this Agreement, the breach of this Agreement, the ownership of shares, board actions, distributions, transfer restrictions, or the liquidation of the Corporation shall first be submitted to good-faith mediation in Wilmington, Delaware. If the matter is not resolved within 30 days after a written demand for mediation, the dispute shall be finally resolved by binding arbitration in the same location.
- The arbitration shall be conducted before a single arbitrator unless the parties agree to a panel.
- The arbitrator may award damages, specific performance, injunctive relief, and any other remedy available at law or in equity, subject to the limitations of this Agreement.
- The prevailing party in mediation, arbitration, or any court proceeding to enforce an award shall be entitled to recover reasonable attorneys' fees and costs, except to the extent prohibited by law.
Clause 9. Notices
Party | Notice address |
Corporation | 100 Sample Plaza, Wilmington, DE 19801 |
Shareholder 1 | 101 Sample Plaza, Wilmington, DE 19801 |
Shareholder 2 | 102 Sample Plaza, Wilmington, DE 19801 |
Shareholder 3 | 103 Sample Plaza, Wilmington, DE 19801 |
Shareholder 4 | 104 Sample Plaza, Wilmington, DE 19801 |
Any notice, demand, consent, waiver, election, or other communication under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by nationally recognized courier, mailed by certified or registered mail with postage prepaid, or transmitted by email to an address designated in writing by the receiving party.
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Clause 10. Governing law and general provisions
- This Agreement shall be governed by and construed in accordance with the laws of Delaware, without regard to conflict-of-law rules that would require the application of another jurisdiction's law.
- If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force to the fullest extent permitted by law.
- This Agreement constitutes the entire agreement among the parties with respect to its subject matter and supersedes prior oral or written understandings on the same subject.
- No waiver of any breach is effective unless in writing, and no waiver of one breach shall be deemed a waiver of any other breach.
- This Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original and all of which together shall constitute one instrument.
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Execution and signatures
IN WITNESS WHEREOF, the undersigned have executed this Shareholder Agreement as of the date first written above.
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Shareholder Agreement Template Overview
Co-owners rarely plan for disagreements until one happens, and by then the options are limited. This shareholder agreement template gives you ready sections for ownership, decision making, share transfers, and exits, so expectations are written down early. Use it as a free shareholder agreement template to start from, then adapt the clauses to your company and have a lawyer review the final version.
The agreement generates in your company's branding and adapts to each ownership structure. Share one link every shareholder opens on any device, and keep each version filed so earlier terms are easy to compare if the ownership structure changes or a new investor joins.
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Who Benefits From Shareholder Agreement Template?
Founders, investors, and company secretaries get the most from an agreement that records how owners will act together.
Founder
Record how ownership, decisions, and exits will work between co-founders while relationships are good and everyone is aligned.
Investor
Review how a company's owners will make decisions and transfer shares before putting your money into the business.
Company Secretary
Keep a clear, consistent record of shareholder terms for every company you manage, so questions are easy to answer.
Legal Counsel
Start from a clear structure and adapt the clauses to each company, instead of drafting a new agreement each time.
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Frequently Asked Questions
Everything you need to know about using this template
It should include ownership percentages, decision making, share transfers, exit terms, and dispute handling. A shareholder agreement template gives you these sections ready to fill in, so expectations between owners are written down early, while everyone still agrees.
Yes. Generate the first draft from a short prompt, then use AI to rewrite, tighten, or restructure any section in seconds.
Open with the parties and ownership details, set how decisions are made, cover share transfers and exits, then close with how disputes are handled. A logical order helps every shareholder follow it.
Fully. This agreement is editable end to end in the drag-and-drop editor, so you can add, remove, or reorder clauses to match your company.
Yes. Add your own ownership details and exit terms straight into this agreement template, then adjust the wording to fit your company.
Yes. Your logo, colours, and fonts are pulled from your website and applied automatically, so the agreement looks on-brand without any manual design.
Record how owners will work together
Start from a ready agreement layout and fill in only what matters, instead of drafting terms from scratch.
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