Shareholder Agreement Optional Clauses

When you download one of Simply-Docs’ Shareholder Agreement Templates you may need to include additional optional clauses tailored to your company’s structure or shareholder dynamics. These optional clauses provide stand-alone clause templates you can insert into your agreement to handle particular issues such as board representation, exit mechanics, deadlock or minority protections.

Below is a brief outline of six key optional clauses offered and how they support and enhance your main shareholder agreement template.

Optional Clause Templates

1. Deadlock Clause

This clause provides a mechanism to deal with situations where the shareholders are equally balanced (e.g., 50:50) and unable to reach agreement on a decision, causing business disruption. By incorporating such a clause into your shareholder agreement, you ensure there is a predetermined resolution path for deadlock, rather than risking indefinite stalemate or forced winding-up.
How it helps:
In the main shareholder agreement templates, adding a clear deadlock mechanism strengthens governance, improves stability, and reduces the risk of a business being trapped by indecision.

2. Deadlock Clause – Multi-Choice

This version of the deadlock clause offering multiple resolution options ,e.g. casting vote of chairman, arbitration, sealed bid “Texas shoot-out” buy-out, or winding up.
How it helps:
Gives shareholders and advisers flexibility to choose the most suitable resolution path at execution, and embeds more robust protection into the shareholder agreement template for high-risk impasse situations.

3. Minority Shareholder Right to a Director Clause

This clause creates a contractual right for a minority shareholder to appoint (or ensure appointment of) a director on the board, and safeguards against majority shareholders removing them without cause. 
How it helps:
When inserted into a standard shareholder agreement template, this clause helps protect minority shareholder interests, ensures board representation and improves fairness in governance structure.

4. Shareholder-Employee Dismissal and Resignation Clause

This clause deals with scenarios where a shareholder is also an employee covering what happens upon dismissal or resignation of the shareholder-employee (for example share buy-back, exit price, non-compete).
How it helps:
Useful for founder-led companies or companies where shareholders are active in management. Embedding it into the shareholder agreement template helps align employment and ownership interests, reduces conflict when someone exits employment, and ensures smooth share transfer arrangements.

5. Drag-Along Clause

This clause allows majority shareholders to “force” minority shareholders to join in a sale of the company on the same terms when a major sale is triggered ensuring that a minority doesn’t block a sale or hold out unfairly. 
How it helps:
Including a drag-along clause in your shareholder agreement template improves exit flexibility, aids investor confidence, and ensures the company remains sale-ready by aligning minority interests with exit strategy.

6. Tag-Along Clause

This clause gives minority shareholders the right to join a sale initiated by the majority shareholders, so they are not left behind or sold out unfairly.
How it helps:
When added to a shareholder agreement template the tag-along clause enhances minority protection, builds fairness into ownership structure and supports investor confidence in minority-shareholder participation.

Benefit of these Shareholder Agreement Optional Clauses

Whilst the prime Shareholder Agreement Templates provide the core structure, rights and obligations among shareholders (whether a new share issue or no issue scenario, majority vs minority bias, etc.) the optional clauses enhance the relevant template by:

• Addressing specific issues (board rights, exit rights, deadlocks) that may not be fully covered in a generic agreement.
• Allowing your agreement to adapt to future changes – such as bringing in investors, shareholders exiting, business sale scenarios.
• Improving investor reassurance (both majority and minority) by embedding protections and mechanisms specific to their interests.

The combination of applying relevant optional clause(s) to a robust base template delivers a comprehensive, tailored shareholder agreement rather than a one-size-fits-all document.

• Deadlock Clause
• Deadlock Clause Multi-Choice
• Minority Shareholder Right To A Director Clause
• Shareholder Employee Dismissal And Resignation Clause
• Drag Along Clause
• Tag Along Clause

Shareholder Agreement Optional Clauses is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.