Oct 03 2025

Shareholders’ Agreement: Key Types, Clauses and Why Every Startup Needs One

In the startup world —and really, in any company with more than one founder— there’s a legal tool that often goes unnoticed… until it’s too late: the shareholders’ agreement. It’s not mandatory. You won’t find it in the Commercial Registry. And yet, it’s probably one of the most important documents to ensure a project moves forward with clarity, trust and long-term stability.

What is a shareholders’ agreement, and why is it so important?

A shareholders’ agreement is a private contract between the partners that sets the rules of the game: who does what, how decisions are made, what happens if someone wants to leave, and how to protect the project in delicate situations. It complements the company’s articles of association — but is far more flexible and adapted to the realities of day-to-day business.

And it’s not a fixed, one-time document. On the contrary: it’s a living instrument that should evolve with the company. Bringing in new partners, raising capital, pivoting business strategy… all of that should trigger a review of the agreement. Not doing so means exposing the company to avoidable risks.

What types of shareholders’ agreements are there?

While each company’s case is unique, there are two common scenarios where this kind of agreement is essential:

1. Founders’ agreement

This is signed at the beginning of the project, when everything is just getting started. It’s where the co-founders agree —in writing— on things that are often just assumed verbally: what role each one plays, their level of commitment, who owns the IP, what happens if someone leaves early, and more.

Typical clauses include:

Division of roles and responsibilities.
Exclusivity and dedication to the project.
Assignment of intellectual property.
Exit rules (e.g., Good Leaver / Bad Leaver clauses).
Decision-making thresholds.
Share transfer mechanisms.

This agreement helps avoid misunderstandings, strengthens trust, and allows the team to focus on building the business.

2. Investor agreement

When the company raises a funding round, the shareholders’ agreement becomes a key part of the deal. This time, the focus isn’t just on the founders — it’s about aligning their interests with those of incoming investors.

These agreements usually cover:

Enhanced rights to information and financial reporting.
Supermajority requirements for key decisions.
Rules on capital increases, anti-dilution clauses, and liquidation preferences.
Exit mechanisms (drag-along and tag-along rights).
Mandatory adherence for future shareholders.

The goal is to create balanced governance and legal certainty for everyone involved.

Key clauses you don’t want to miss

Regardless of the stage or who’s involved, there are some clauses that should be in every properly drafted agreement:

Commitment and exclusivity: key shareholders agree to stay with the company for a minimum period and not to work on competing projects. If they breach this, they may be required to sell their shares under penalising conditions.
Intellectual property (IP): everything developed for the project belongs to the company — including past contributions from founders or collaborators.
Drag-along: if a majority decides to sell, they can require the others to sell under the same conditions. This avoids blocks in M&A deals.
Tag-along: protects minority shareholders by allowing them to join a sale if a majority shareholder exits.
Right of first refusal: if a shareholder wants to sell, existing shareholders have the first option to buy.
Supermajorities: critical decisions (selling assets, changing the bylaws, etc.) may require more than a simple majority — and sometimes the consent of specific founders.
Good Leaver/Bad Leaver: if a shareholder leaves for good reason, they can sell at market value. If they leave without cause or breach the agreement, they may have to sell at nominal value.

So, why sign it from the start?

Because it’s much easier to agree on terms when things are going well. If you wait for conflict, it’s often too late. A clear, well-thought-out shareholders’ agreement is a sign of maturity. It gives founders peace of mind and offers investors the legal certainty they need to get involved.

It also prevents unnecessary renegotiations, decision-making deadlocks, or messy exits that could seriously slow the business down.

In summary, the shareholders’ agreement isn’t just a legal formality. It’s an act of foresight, responsibility, and long-term thinking. It doesn’t just protect — it aligns, empowers and builds trust.

At Letslaw, we work closely with startups, entrepreneurs and investors to design solid shareholders’ agreements that are tailored to each stage of the business and compliant with Spanish corporate law. Because a good agreement doesn’t slow you down — it propels you forward.