Shareholders Agreement
A Shareholders Agreement allows you to clarify the relationship between shareholders of your company.
Last updated October 23, 2025
Suitable for Australia
Create & Customise Legal Templates Online
When do you actually need a shareholders agreement?
When do you actually need a shareholders agreement?
What is a shareholders agreement?
What is a shareholders agreement?
A shareholders agreement is a legally binding contract between a company's owners that sets out how the business is run and what happens when circumstances change. It's usually put in place early, while the shareholders are on good terms, so the rules are agreed before any disagreement arises.
It works alongside two things that already apply to your company: its constitution and the Corporations Act 2001. Those cover the basics of how a company operates, but say little about the situations that most often cause friction between owners, such as someone leaving, a new investor joining, or a deadlock over a key decision.
A shareholders agreement typically deals with:
- Who has a say over major decisions
- How shares can be bought, sold, or transferred
- What happens if an owner leaves, is removed, or passes away
- How dividends are decided
- How disputes are resolved
It's designed for companies with two or more shareholders.
What's included in this template?
What's included in this template?
It's a 28-page agreement that covers the terms most Australian companies need, rather than a short summary document. It's the same structure Lawpath's lawyers work from when reviewing a founder's agreement in a consultation.
The main sections cover:
- The shareholders and their shareholdings, recorded in a schedule
- Definitions that set how the rest of the agreement operates, including "good leaver" and "bad leaver"
- Board composition and how directors are appointed
- Reserved matters: the major decisions that need special or unanimous approval
- Restrictions on transferring shares, including pre-emptive rights (the first right to buy)
- Drag-along and tag-along rights for a future sale
- What happens to shares when a shareholder exits, including buy-back terms
- Vesting, where shares are earned over time rather than owned outright from the start
- Dividend policy, dispute resolution, and deadlock provisions
Clauses can be added or removed so the document matches your company.
How to create a legal document
- check_circle
Access the Document Library
- check_circle
Select the template that matches your needs
- check_circle
Customise by adding or removing clauses with assistance from Lawpath AI
- check_circle
Personalise with your headers, footers, logos, or additional text
- check_circle
Store all documents securely in your account for easy access
Frequently asked questions
What does a shareholders agreement cost?
keyboard_arrow_upHow long does it take to create?
keyboard_arrow_upIs it legally binding?
keyboard_arrow_upDo I need one, and when?
keyboard_arrow_upWhat is vesting, and how does it work?
keyboard_arrow_upWhat happens if a shareholder leaves or passes away?
keyboard_arrow_upWhat are drag-along, tag-along and pre-emptive rights?
keyboard_arrow_upHow does it protect minority or founding owners?
keyboard_arrow_upIs the template enough, or do I need a lawyer?
keyboard_arrow_upCan the template be customised?
keyboard_arrow_upHow is it different from a constitution or a co-founder agreement?
keyboard_arrow_upCan new shareholders be added later?
keyboard_arrow_upWhat happens without a shareholders agreement?
keyboard_arrow_upView Sample Shareholders Agreement
The Legal Risk Score of a Shareholders Agreement Template is Medium
Our legal team have marked this document as medium risk considering:
- The document allows for significant control over company decisions by a limited number of shareholders, which might concentrate power and limit broader shareholder influence.
- There are provisions that allow for the sale or transfer of shares under specific conditions which could lead to potential changes in ownership that might not align with all shareholders' interests.
- The agreement binds parties to specific actions regarding the management and operational direction of the company, which could restrict flexibility in responding to future business challenges or opportunities.
Meet Our Users
Articles about Shareholders Agreement
Why your business needs a Shareholders Agreement
Learn about a shareholders agreement, what it includes and how it can be beneficial for your business.
When to Use a Shareholders' Agreement (2025 Update)
A Shareholders' Agreement protects both a company and its members by setting out the terms of ownership. Find out when to use one here.
Directors’ Roles in Shareholders Agreements
There's no one correct form of shareholders agreement. This raises the question, what should you include in your shareholders agreement? Find out here.
Quick Tips: Legal Documents For Business Founders
Learn about the legal documents, including Shareholder's Agreement and Vesting Agreement, that you may need when starting a business.
Company Constitution vs Shareholders Agreement
A company constitution and shareholders agreement are both crucial documents when starting your company. Find out how they're different in this article.
Checklist For New Shareholders
Just become a new shareholder in a business? Not sure exactly what shareholders rights and responsibilities are? Learn today about being a new shareholder!
Can Shareholders Liquidate a Company?
Shareholders have an inherent interest in the performance of their company. But if the company is struggling, can shareholders liquidate the company?
How to Exit Your Shareholders' Agreement
Are you looking to sell your shares in a company but don't know your exit route? Read on to learn how to exit your shareholders' agreement.
Explaining Good Leaver and Bad Leaver Provisions
Any strong Shareholders Agreement will include good and bad leaver provisions for departing shareholders. Find out more here.
Looking for more documents?
Privacy Policy
A Privacy Policy outlines how your business will use, store and collect your customers' information. A Privacy Policy is required by law in certain circumstances.
Loan Agreement
This Loan Agreement can be used by lender when offering a loan to a Borrower.
Non-Disclosure Agreement (Mutual)
A Non-Disclosure Agreement (Mutual) allows you and another party to share confidential information while legally forbidding either party from disclosing that information to any other person or entity.
Will
A Will is an essential document as part of your estate plan. This Will cannot be e-signed.
Non-Disclosure Agreement (One Way)
A Non-Disclosure Agreement (One Way) allows you and another party to share confidential information while legally forbidding the other party from disclosing that information to any other person or entity.
Website Terms and Conditions of Use (Services)
This Website Terms and Conditions of Use (Services) document is specifically tailored for websites selling services.
Employment Agreement (Casual)
This Employment Agreement (Casual) is suitable for casual employees in any industry. This agreement is essential when hiring new casual employees for your business.
Business Sale Agreement
A Business Sale Agreement is used to clearly set out all relevant terms of the sale when selling or buying a business.