Clough & Willis Solicitors, Commercial and private legal services UK

Shareholders Agreement

A shareholders' agreement is the equivalent of a partnership agreement where the trading entity is incorporated. As such, it is equally essential to a partnership agreement and fulfils a similar but not the same role.

Typically a shareholders' agreement will regulate the rights between the shareholders and sits 'on top' of the company's articles of association which it will normally prevail over. Since it is outside the scope of registration requirements under the Companies Act, it has the advantage of being private and will often contain detailed provisions as to rights of transfer of shares, regulation of the business itself, business plan, reserved or veto rights and any other matters for which the shareholders wish to provide. Since it is binding on the shareholders as a  contract, its flexibilty makes it a useful tool not only in start up situations but for ongoing businesses.

Where different businesses or individuals have pooled their contributions for a particular purpose it will contain project-specific provisions as a joint venture agreement.

A considerable advantage of a shareholders' agreement is that it can help to prevent complaints of unfair prejudice since it can provide a right of involvement in management and appropriate exit routes.

There are three main instances where you will require a Shareholders Agreement and they are as follows:

  • Quasi Partnerships - this arises when a small number of owners also share the management of a company.  The result is that principles of partnership law and a requirement of fair conduct overlay the strict principles of company law.  The exclusion of anyone from participating management can give rise to a claim of unfair prejudice. 
  • Investment Agreements - these will govern the rights and obligations of investors and other shareholders in respect of the initial investment, the ongoing business of the company and any exits of the investors or other shareholders. 
  • Joint Ventures - when two companies have an idea for a new business they may wish to conduct that new business through a separate new company for which each of their companies will be a shareholder. A Joint Venture Agreement will detail the relationship between the two parties stating the roles and responsibilities that will be required of each company during the joint venture and details of any financial rewards to each of the shareholding companies.  A typical example would be one of the companies may bring the property and the other company may bring a work force and know-how.

For information on general or bespoke Shareholders Agreements, please contact me Guy Lachlan now on freephone 0800 083 0815 or by email guy.lachlan@clough-willis.co.uk.



We have been using Clough & Willis for ten years and found them to be very efficient in all aspects of their work. What I like about their firm is that they cover a wide variety of legal services and are very quick to respond to our needs.

Nigel Compsty, Managing Director
H Compsty & Son Ltd


The contact for my name change and divorce was Marie Whittaker who again was completely professional and gave me complete confidence from out first meeting. My divorce proceeded smoothly, quickly and efficiently. I was updated regularly by letters and phone calls.

Comments taken from client satisfaction survey


"Level of service seems just right. The friendly, helpful staff explained procedures well and made everything clear."

Comments taken from client satisfaction survey


"The team are a pleasure to work with, friendly but always professional in their dealings. Following the successful sale of my business to Veolia Environmental Services plc, I continue to play a key role in the business. I would recommend Clough & Willis to business owners."

Chris Wright Recycling
H Chris Wright


"I would like to take this opportunity to thank you, personally, and on behalf of the Directors of SRS for all the time and work you put into the successful MBO. Professional at all times, your advice was client focused and to the point, and we were particularly impressed at your ability to work to a tight schedule, ensuring we completed on our deadline date."

Alex Docherty,
Director Sound Reduction Systems


Throughout the whole process, Clough & Willis kept me well informed and my stress levels to non-existent. I felt completely looked after with the team taking care of my best interests, I felt they had complete control and it was very reassuring.

Comments taken from client satisfaction survey


From first contact to the last, everyone has been very professional and reassuring through what has been an emotional and stressful time for us and without the help of your company it would have been much more difficult for me and my husband.

Comments taken from client satisfaction survey


I was very impressed with your firm at the outset when I first called in November 2009 after my uncles death. All staff from the receptionist and secretary through to the Partners were professional, friendly and helpful and provided the best response out of the 3 Bury firms I called.

Comments taken from client satisfaction survey


Clough & Willis are very understanding and made me feel valued, they showed me respect knowing I was albeit apprehensive of dealings within the legal profession and their workings

Comments taken from client satisfaction survey


Besides being professional Clough & Willis are also friendly and kind, making one feel relaxed able to communicate easily about the business in hand which they see to efficiently keeping in contact continually. Thank you for all you did.

Krystyna Bzdega


From reception through secretarial to solicitor the approach and attention to detail in handling my case was professional and gave me confidence that the matter would be handled to my satisfaction.

Mr M Booth


I have dealt with Clough & Willis for years since we moved to the area from Manchester and both my husband and I always appreciated your helpfulness and professionalism. Thank you

Theresa Moreen Woolley


Lorraine, I would just like to say "thank you very much" for all your hard work and assistance in the letting of the above property. The negotiations were somewhat protracted, due to a breakdown on my client's side, and I feel that your persistence and hard work led to the eventual lease completion. I look forward to working with you in the near future. Kind regards, Neil Higson, for and on behalf of Nolan Redshaw Ltd

Nolan Redshaw Chartered Surveyors


We have been impressed with the friendly professionalism of all staff, Rebecca Green has been wonderfully helpful, thorough, patient, kind and supportive. Her reassuring guidance has made some very sad and difficult times easier to bear. We hope Rebecca receives recognition for her excellent service.

Testimonial from Mr & Mrs Smith

employee advantage