Shareholder Agreement Templates: Scrib🐮

TL;DR: Scrib🐮's M1 Templates give co-founders and investors a structured shareholder agreement covering share transfers, vesting schedules, drag-along and tag-along rights, and deadlock resolution — without the £3,000 solicitor invoice.

The Challenge

A shareholders' agreement is the contract between co-founders and investors that governs what happens when things go wrong: a co-founder wants to leave, an investor wants to sell, the founders disagree on a strategic decision, or one shareholder fails to contribute what was agreed. Without a shareholders' agreement, disputes are resolved by the articles of association (which may provide no mechanism) or by expensive litigation.

Most co-founders plan to get around to a shareholders' agreement eventually. The problem is that the optimal time to negotiate it is before disagreements arise — ideally at the time of company formation. The second-best time is immediately after a funding event, when the terms of the investment are fresh. Waiting until a dispute has occurred means negotiating from a position of conflict.

The obstacle is cost. UK solicitors charge £2,000–£5,000 for a standard shareholders' agreement; Australian and Canadian lawyers charge equivalent amounts. For pre-revenue startups, this is genuinely prohibitive.

How Scrib🐮 M1 Templates Solve It

Scrib🐮's M1 Template module for shareholders' agreements provides a comprehensive framework covering the provisions that matter most for small companies and early-stage startups.

Parties and share structure:

The template begins with the parties (company, all shareholders, and any relevant holding entities) and the share structure at the date of the agreement. This section automatically cross-references the share register to ensure consistency.

Reserved matters:

Reserved matters are decisions that require shareholder consent above the ordinary majority — typically unanimous or supermajority (75% or higher). The template provides a customisable reserved matters schedule covering: issuing new shares, taking on debt above a threshold, acquiring or disposing of material assets, changing the company's business, and appointing or removing the CEO. You configure the threshold for each matter.

Share transfer restrictions:

• Pre-emption rights: If a shareholder wishes to sell shares, existing shareholders have the right of first refusal at the same price and terms. The template includes the offer notice procedure, acceptance period (typically 30 days), and fallback sale conditions.
• Drag-along rights: If shareholders holding a specified percentage (typically 75%) agree to sell the company, they can require minority shareholders to sell on the same terms. The template covers the drag notice procedure and pricing protections for minority shareholders.
• Tag-along rights: If a majority shareholder sells, minority shareholders can require the buyer to purchase their shares on the same terms. The template includes the tag notice and pro-rata calculation.

Vesting and leaver provisions:

For companies with co-founders or key employees holding equity, the template includes:

• A vesting schedule (typically 4 years with a 1-year cliff) that applies to founder shares
• Good leaver / bad leaver definitions — determining whether a departing shareholder transfers shares at fair market value (good leaver) or at cost (bad leaver)
• The specific circumstances that constitute good leaver vs bad leaver status

Deadlock resolution:

When shareholders cannot agree on a reserved matter, the agreement needs a mechanism to resolve the deadlock. The template covers the most common approaches: escalation to senior management, mediation, and as a last resort, Russian roulette (one shareholder offers to buy the other's shares at a stated price, and the other shareholder can either sell or buy at that price). You select which mechanisms apply.

Governing law:

The template asks for the governing law jurisdiction (England and Wales, Australia — specifying the state, Canada — specifying the province, New Zealand). The dispute resolution clause is adjusted accordingly, referencing the relevant arbitration or court system.

Reference: UK shareholders' agreements are typically governed by the Companies Act 2006 framework (https://www.legislation.gov.uk/ukpga/2006/46/contents). Australian versions reference the Corporations Act 2001 (https://www.legislation.gov.au/Details/C2019C00022).

Scrib🐮 prepares documents; for advice on shareholder agreement terms specific to your funding round or co-founder relationship, consult a corporate lawyer.

What's Included in Your Scrib🐮 Pass

Pricing: From $149/month — all menus, all countries, unlimited documents.

Why Scrib🐮 vs DIY or Traditional Services

DIY risk: DIY shareholders' agreements downloaded from the internet are the highest-risk document type in Scrib🐮's template library. Terms like "fair market value" (used in leaver provisions) require a clear definition mechanism; a vague definition creates disputes. "Bad leaver" definitions must be precise — catching intentional misconduct while not penalising involuntary departures (illness, death, redundancy). Generic templates frequently lack precision in exactly these high-stakes areas.

Corporate solicitor: UK solicitors typically charge £2,000–£5,000 for a shareholders' agreement, with complex VC terms doubling that cost. For a two-founder startup with no external investors, this cost is significant.

Scrib🐮: The template covers the provisions that cause the most disputes when missing: vesting, leaver clauses, drag/tag-along rights, and reserved matters. You configure each provision through guided questions. The result is a structured, jurisdiction-specific document that goes far beyond a blank template — while remaining reviewable by any corporate lawyer at a fraction of the cost of having them draft it from scratch.

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Frequently Asked Questions

Q: Do I need a shareholders' agreement if I already have articles of association?

They serve different purposes. Articles of association are public and bind all shareholders including future ones. A shareholders' agreement is private and only binds the parties who sign it. However, a shareholders' agreement can include terms (vesting schedules, information rights, anti-dilution protections) that are typically kept private and not disclosed in public registry filings. Most companies benefit from having both.

Q: Can Scrib🐮 prepare a shareholders' agreement for a company with external investors?

Yes. The M1 Template includes provisions appropriate for companies with both founder shareholders and external investors, including information rights, anti-dilution provisions, and investor consent thresholds for reserved matters. For VC or angel funding rounds, a corporate lawyer should review the terms against the investor's term sheet before signing.

Q: What happens if one co-founder refuses to sign the shareholders' agreement?

A shareholders' agreement only binds parties who sign it. If a co-founder refuses to sign, the provisions do not apply to them. This is a significant governance risk. Before company formation is the ideal time to negotiate and sign the agreement — before equity has been issued and while all parties are motivated to formalise the relationship.

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