A neutral-form 50:50 shareholders' agreement for a joint venture private limited company under the Companies Act 2006 in England & Wales. The defining feature of an equal joint venture is deadlock, so this template focuses on how disagreements are broken.
How to use this template, read this first - Replace every
[SQUARE-BRACKET]field before use. - In a 50:50 venture, neither party can out-vote the other, so a deadlock (genuine inability to agree) can paralyse the company. Choose a deadlock mechanism deliberately, the wrong one can force an unwanted exit or hand control to the other side. - This sits alongside the articles of association; align them. Have a solicitor review before use.
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THIS SHAREHOLDERS' AGREEMENT is made on [DATE]
BETWEEN (1) [SHAREHOLDER A]; (2) [SHAREHOLDER B]; and (3) [COMPANY NAME] (no. [NUMBER]) (the "Company"). Each shareholder holds 50% of the shares.
Agreed terms
1. The joint venture. The Company's business is [DESCRIBE]. Each shareholder holds 50% and the parties intend to run the Company jointly and in good faith.
2. The board. Each shareholder may appoint [the same number of] directors. The quorum requires at least one director appointed by each shareholder. To preserve equality, the chair has no casting vote.
3. Decisions. Operational matters are decided by the board. The reserved matters in Schedule 1 require the consent of both shareholders.
4. Funding. Further funding is provided [equally] only if both agree; the consequences of a shareholder failing to fund (e.g. dilution / loan) are set out in Schedule 2.
5. Deadlock. A "Deadlock" arises if the board or shareholders cannot agree a reserved matter after [NUMBER] meetings. On a Deadlock:
- (a) Escalation: the matter is referred to the [senior representatives / chief executives] of each shareholder, who will try in good faith to resolve it within [NUMBER] days.
- (b) Mediation: if still unresolved, the parties will attempt mediation.
- (c) Exit mechanism: if the Deadlock persists, [choose one and define it precisely]:
- a "Russian roulette" (one party names a price; the other must either buy at that price or sell at it); or
- a "Texas shoot-out" (sealed bids; highest bidder buys the other out); or
- an orderly winding-up of the Company.
6. Share transfers. Transfers are subject to pre-emption and tag-along/drag-along rights (Schedule 3). [Specify how these interact with the deadlock mechanism.]
7. Dividends. [Set out the distribution policy, commonly equal.]
8. Confidentiality and non-compete. Each shareholder will keep the Company's affairs confidential and not compete for [NUMBER] months after ceasing to be a shareholder, so far as reasonable.
9. Governing law and jurisdiction. This Agreement is governed by the law of England and Wales, whose courts have jurisdiction.
Execution
Signed by [A] / [B] / for [COMPANY]: __________________ Date: [DATE]
Schedules: 1, Reserved matters · 2, Funding & default · 3, Transfer provisions
--- This template is a starting point and not legal advice. Deadlock-resolution mechanisms have serious consequences and must be chosen with care and aligned with the articles, have a qualified solicitor review and adapt both before use. Governing law: England & Wales.