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Private Equity Shareholders Agreement for the United Kingdom

Private Equity Shareholders Agreement Template for England and Wales

A Private Equity Shareholders Agreement under English and Welsh law is a comprehensive legal document that governs the relationship between private equity investors and other shareholders in a company. It establishes the rights, obligations, and responsibilities of all parties, including voting rights, board representation, exit mechanisms, and investment protection provisions. The agreement typically includes detailed provisions for corporate governance, share transfers, anti-dilution protection, and investor privileges, all structured within the framework of English and Welsh company law.

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Private Equity Shareholders Agreement

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What is a Private Equity Shareholders Agreement?

The Private Equity Shareholders Agreement is essential when a private equity firm invests in a company, whether through a minority or majority stake. This document, governed by English and Welsh law, sets out the fundamental terms of the investment relationship, including investor protections, governance rights, and exit provisions. It's typically executed alongside the investment completion and works in conjunction with the company's Articles of Association. The agreement is crucial for protecting investor interests while providing a clear framework for company operation and future exits.

What sections should be included in a Private Equity Shareholders Agreement?

1. Parties: Identification of all shareholders, the company, and any other relevant parties

2. Background: Context of the investment and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Investment Terms: Details of investment amount, share classes, and payment terms

5. Governance Rights: Board composition, voting rights, and reserved matters

6. Transfer Restrictions: Limitations on share transfers and exit provisions

7. Tag and Drag Rights: Co-sale rights and forced sale provisions

What sections are optional to include in a Private Equity Shareholders Agreement?

1. Anti-dilution Protection: Protection against value dilution, used when there's risk of future fundraising

2. Management Provisions: Required when management holds shares or options

3. Founder Obligations: Include when founders remain involved in business

4. ESOP Provisions: Required when employee share schemes exist or are planned

What schedules should be included in a Private Equity Shareholders Agreement?

1. Share Capital Table: Current and post-investment shareholding structure

2. Reserved Matters: Detailed list of decisions requiring investor consent

3. Articles of Association: New/amended articles reflecting investment terms

4. Business Plan: Company's strategic plan and financial projections

5. Warranties: Standard warranties given by company and founders

Authors

Alex Denne

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

Jurisdiction

England and Wales

Cost

Free to use
Relevant legal definitions











































Clauses






































Industries

Companies Act 2006: Primary legislation governing company operations, including shareholder rights and obligations, director duties, share transfer provisions, and company administration and governance

Financial Services and Markets Act 2000: Key legislation establishing regulatory framework for financial services, including investment restrictions and requirements

Financial Services Act 2012: Legislation covering financial conduct regulations and market oversight

FCA Regulations: Regulatory framework covering investment restrictions, disclosure requirements, and conduct of business rules set by the Financial Conduct Authority

Takeover Code: Regulations governing company acquisitions and mergers, relevant if the company might be subject to takeover provisions

Common Law Contract Principles: Fundamental contract law principles including contract formation, along with the Misrepresentation Act 1967

Enterprise Act 2002: Competition law legislation governing business practices and market competition

Competition Act 1998: Legislation prohibiting anti-competitive behavior and abuse of dominant market positions

Employment Rights Act 1996: Employment law relevant for management participation schemes and employee rights

Income Tax Act 2007: Tax legislation governing income tax implications for shareholders and distributions

Corporation Tax Act 2010: Tax legislation covering corporate tax implications for the company and corporate transactions

UK GDPR and Data Protection Act 2018: Data protection legislation governing the processing and protection of personal data in business operations

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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