Memorandum Of Understanding Shareholders Agreement Template for England and Wales

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Key Requirements PROMPT example:

Memorandum Of Understanding Shareholders Agreement

"Need a Memorandum Of Understanding Shareholders Agreement for our tech startup with three founding shareholders and two potential investors, focusing particularly on pre-emption rights and anti-dilution protection as we're planning a Series A funding round in March 2025."

Document background
The Memorandum Of Understanding Shareholders Agreement is utilized when parties wish to document their preliminary understanding and intentions regarding shareholding arrangements before committing to a formal, binding agreement. Under English and Welsh law, this document typically precedes more detailed negotiations and due diligence processes. It covers key aspects such as share ownership, voting rights, board composition, and transfer restrictions while maintaining flexibility for future modifications. This type of agreement is particularly valuable in complex corporate structures or when dealing with multiple shareholders who need to align their interests before proceeding with a formal arrangement.
Suggested Sections

1. Parties: Identification and details of all shareholders and the company

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Shareholding Structure: Current and proposed share ownership details

5. Board Composition: Structure and appointment of board members

6. Shareholder Rights: Voting rights, dividend rights, and other entitlements

7. Transfer Restrictions: Rules regarding share transfers and right of first refusal

Optional Sections

1. Tag-Along Rights: Rights of minority shareholders to join in sale of shares when majority shareholders sell their stakes

2. Drag-Along Rights: Rights of majority shareholders to force minority shareholders to join in the sale of the company

3. Anti-dilution Provisions: Protections for existing shareholders against ownership dilution in future funding rounds

4. Reserved Matters: List of decisions requiring special majority or unanimous shareholder consent

Suggested Schedules

1. Schedule 1 - Current Shareholding Schedule: Detailed breakdown of current share ownership and shareholder information

2. Schedule 2 - Board Resolution Templates: Standard formats for board decisions and resolutions

3. Schedule 3 - Share Transfer Forms: Templates and procedures for share transfer documentation

4. Schedule 4 - Deed of Adherence: Template agreement for new shareholders joining the shareholders agreement

5. Schedule 5 - Company Information: Key company details including registration information, registered office, and business activities

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Clauses
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company law in England and Wales, covering statutory shareholders' rights, directors' duties, company administration requirements, and share capital regulations

Financial Services and Markets Act 2000: Legislation governing financial services and markets, relevant for companies dealing with regulated financial activities and investment requirements

Small Business, Enterprise and Employment Act 2015: Act covering transparency requirements and corporate governance provisions for small businesses and enterprises

Contract Law principles: Common law principles governing contract formation, consideration, and capacity to contract under English law

Competition Act 1998: Legislation governing anti-competitive practices and market dominance considerations

Data Protection Act 2018 and UK GDPR: Laws governing data protection obligations and personal data handling requirements

Equality Act 2010: Legislation ensuring non-discrimination and equal treatment of shareholders

FCA Regulations: Financial Conduct Authority regulations governing financial conduct requirements and regulatory compliance

Corporate Governance Code: Best practice guidelines for corporate governance, particularly relevant for listed companies

PSC Regulations: People with Significant Control regulations governing transparency requirements and beneficial ownership reporting

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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