Shareholders Agreement Term Builder
Input company structure and get AI-drafted shareholders agreement clauses
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About Shareholders Agreement Term Builder
Draft Shareholders Agreement Terms with Confidence
A shareholders agreement is one of the most important documents a company can have - and one of the most frequently neglected. When things are going well, nobody thinks about what happens when a shareholder wants to exit, when there's a deadlock on the board, or when someone wants to sell their shares to an outsider. The Shareholders Agreement Term Builder helps you think through these scenarios and generate well-structured terms before problems arise.
How the Term Builder Works
The tool presents you with the common clauses found in shareholders agreements and lets you configure each one according to your specific situation. For each clause, you set the key parameters - like the tag-along and drag-along thresholds, the valuation methodology for share buybacks, the deadlock resolution mechanism, or the dividend policy - and the builder generates the appropriate term language.
You can build terms for as many clauses as you need in a single session and compile them into a cohesive agreement structure. Everything runs in your browser, so your sensitive corporate arrangements remain completely private.
Essential Clauses Every Shareholders Agreement Needs
Pre-emption rights give existing shareholders the first right to purchase shares before they're offered to outsiders. This is fundamental to maintaining the balance of power in a company. The term builder lets you specify the notice period, pricing mechanism, and what happens if existing shareholders decline.
Tag-along and drag-along rights protect minority and majority shareholders respectively. Tag-along rights let minority shareholders join a sale on the same terms as the majority. Drag-along rights let a majority shareholder force minorities to sell when a buyer wants 100% of the company. The builder helps you set the triggering thresholds and conditions for both.
Deadlock resolution is critical in 50/50 joint ventures or companies with evenly split ownership. Options include mediation, escalation to designated senior representatives, put/call mechanisms, or even a "Russian roulette" clause where one party names a price and the other must either buy or sell at that price. The shareholders agreement term builder generates language for whichever mechanism you choose.
Reserved matters define decisions that require unanimous consent or a super-majority, preventing any single shareholder from making unilateral changes to fundamental aspects of the business. Common reserved matters include changing the company's constitution, issuing new shares, taking on debt above a threshold, or entering new lines of business.
Who Benefits from This Tool?
Startup co-founders splitting equity among themselves absolutely need a shareholders agreement, and the earlier the better. Building the terms together using this tool forces the important conversations upfront - what happens if someone leaves? What if we disagree on strategy? What if one founder wants to sell? Having these answers documented prevents the kind of disputes that destroy promising companies.
Investors and venture capitalists can use the term builder to draft the shareholder-related provisions of their investment terms. Corporate lawyers can use it as a drafting accelerator, generating standard clause language quickly and then customizing it for each client's situation. Family businesses bringing the next generation into the ownership structure need clear terms governing how shares can be transferred, voted, and valued.
A Starting Point, Not a Finished Product
Like all our legal tools, the Shareholders Agreement Term Builder produces well-crafted starting language that should be reviewed by a qualified corporate lawyer before being finalized. Shareholders agreements interact with the company's articles of association, applicable company law, and any existing contracts, so professional review ensures everything is consistent and enforceable. The tool gets you to a strong first draft in minutes rather than days - that's its value.