Joint venture and shareholder agreements

A shareholder agreement is a private contract between some or all shareholders. It sets out how the company is run and how decisions are made. It also covers what happens if someone wants to sell or leave, or if a dispute arises.

It is often used to protect relationships, investment and control when there is more than one owner. Shareholder agreements commonly cover governance, share transfers and protections such as pre-emption rights, drag and tag rights and leaver provisions.

Your articles of association set the baseline rules. A shareholder agreement can add practical protections and commercial detail and cover matters the articles do not, so the two need to be aligned to avoid conflict between the documents.

A joint venture agreement is a legally binding contract under which two or more parties work together on a shared project or business goal while remaining separate businesses. It sets out responsibilities, governance, funding, profit share, risk and exit arrangements. It helps avoid misunderstandings by making roles and expectations clear from the start.

Some joint ventures operate by contract between the businesses, while others use a new company owned by the parties. The right approach depends on risk, tax, funding, staff and the commercial goal.

If two or more people own a company, or two businesses are building something together, it is worth agreeing the ground rules early, before problems start. A well-drafted agreement sets expectations on decision making, funding, exits and what happens if there is a dispute.

Typical moments include:

• co-founders setting up a new company
• an investor coming in
• a family business planning succession
• two businesses partnering on a project

We advise founders, family businesses, SMEs, management teams and investors on new agreements, on updating old ones and on aligning the documents with the company's articles.