Basic Shareholder Agreement – New Share Issue

This Basic Shareholder Agreement – New Share Issue is a straightforward, professionally drafted legal template designed for private limited companies that are issuing new shares to investors. It sets out how shareholders will manage the company, their rights and obligations, and what happens if shares are transferred, sold, or new shares are issued in the future.

It is part of Simply-Docs’ range of Shareholder Agreement Templates, which cater for both new share issue and no share issue situations, with standard, long-form, Minority/Majority versions and Good/Bad Leaver versions available for more complex ownership structures.

How Simply-Docs Helps You Prepare and Choose

Before completing this agreement, you can use these complementary resources to ensure accuracy and suitability:

• Shareholders’ Agreement Notes – Explains key clauses, shareholder rights, and governance considerations.
• Shareholders’ Agreement Checklist – Helps gather the information needed to complete the agreement correctly.
• Which Shareholder Agreement? – Outlines differences between Basic, Standard, and Long-Form agreements so you can select the right template for your company.

These tools help ensure you chose the most appropriate agreement to suit your company’s structure, maintaining comprehensive and legal consistency.

What is the Most Suitable Application of this New Share Issue Basic Shareholder Agreement?

This template is intended to be used by shareholders of a company which has only recently been incorporated or purchased “off the shelf” at the time of its execution;

• provides for the immediate issue of new shares. 
• designed for private companies in which each shareholder will own an equal share
• sets out the basic elements of the shareholders’ relationship with each other
• includes the right to first refusal (pre-emption) for the parties should one shareholder wish to sell their shares
• helps to prevent outside investors from muscling in on the company
• determines that any transferee must agree to be bound by the terms of this agreement as a precondition to the transfer
• has no bias toward one particular kind of shareholder, minority nor majority 
• is well suited to family companies

It is a short form document which creates a contractual relationship between the shareholders of a private limited company, enforcing their shareholder rights against the company under its constitution and allowing individual shareholders to enforce their rights under the agreement against each other, providing more protection from the possibility of being squeezed out of the management of the company.

How to Use this Template?

In addition to the help provided in the documents above this agreement provides (at the front) a set of specific guidance notes to assist in tailoring the template. These guidance notes do not form part of the agreement and should be removed before the agreement is used.

This Shareholder Agreement is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

Whilst this New Share Issue Basic Shareholder Agreement (UK) is comprehensive within its' designed application particular circumstances may require additional clauses. Simply-Docs also provides a range of Shareholder Agreement Optional Clauses such as deadlock provision and a shareholder employee dismissal clause.

Additional Template Recommendation(s)

It is recommended that companies use one of the Simply-docs Articles of Association with this Shareholder Agreement. Where other Articles are incorporated caution should be taken for inconsistencies between the two documents. Clause 22 of this agreement provides that the Shareholder Agreement will prevail over the Articles in the event of an inconsistency but inconsistencies should nevertheless be avoided because claims for breach of a Shareholders’ Agreement are subject to different rules to claims for a breach of the Articles.

Basic Shareholder Agreement – New Share Issue is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.