Two partners who get along well at the start never imagine the day when one will want to leave, when a strategic disagreement will paralyse decisions, or when one will stop contributing while keeping their shares. The shareholders' agreement exists precisely to organise these situations calmly, while trust prevails, rather than to endure them in conflict.
Maître Léa Scemama drafts and negotiates shareholders' agreements in Paris for founders, executives and investors, seeking in every clause the balance between freedom to operate and the protection of each party.
Agreement or articles: what is the agreement really for?
The articles and the agreement are complementary. The articles, public, set the legal framework of the company and bind everyone. The agreement is a confidential contract: known only to its signatories, it allows sensitive topics to be addressed that one does not wish to make public, such as director remuneration, non-competition undertakings or exit conditions.
Its strength is also its limit: because it is only a contract, its breach is sanctioned first by damages and not by the nullity of the act performed in fraud. Hence the crucial importance of its drafting.
Governance and decision clauses
The agreement concretely organises how power is shared and how decisions are made:
- Allocation of board seats and management mandates
- Major decisions subject to reinforced approval (veto rights over debt, major investments, hiring of executives)
- Enhanced information rights for minority partners or investors
- Handling of deadlock situations between equal partners, with crisis-exit mechanisms
- Exclusivity and non-competition undertakings of operating partners
Clauses relating to shares
This is the heart of the agreement: controlling who holds the capital and on what conditions shares may circulate. These clauses prevent a partner from transferring their shares to an unwanted third party or a competitor.
- Lock-up clause prohibiting share transfers for a set period
- Pre-emption clause giving other partners priority to buy back shares offered for sale
- Approval clause subjecting any entry into the capital to the partners consent
- Cap on shareholdings and preservation of the capital balance
Exit clauses
Anticipating exit protects both the departing partner and those who remain. The agreement provides the mechanisms to unwind situations without deadlock or litigation.
- Tag-along clause allowing a minority partner to sell on the same terms as a majority partner
- Drag-along clause requiring minority partners to follow a majority sale of the company
- Cross put-and-call options in the event a founder leaves
- Buy-back clause on death, incapacity or departure of an operating partner
Protection, bad leaver and remedies
So-called good leaver / bad leaver clauses adjust the buy-back price of shares according to the circumstances of departure: a founder who leaves loyally will not be treated like one who leaves the project prematurely or commits serious misconduct. Properly calibrated, these clauses protect everyone's long-term commitment.
Because an agreement is only worth its enforceability, the firm pays particular attention to remedies: penalty clause, unilateral sale undertakings making forced transfer possible, and provisions allowing, in certain cases, specific performance rather than mere damages.
Why have your agreement drafted by a lawyer?
An agreement is only valuable if it fits your actual situation. Generic templates stack clauses that are sometimes contradictory or unenforceable. The lawyer prioritises your objectives, negotiates the balance points between partners and drafts truly enforceable mechanisms.
The agreement works closely with company formation and fundraising operations. In case of disagreement, it is your best defence in a dispute between partners.
Frequently asked questions
What is the difference between the articles and a shareholders agreement?
The articles are public and enforceable against everyone; the agreement is a confidential contract signed between some or all of the partners. The agreement allows you to go further than the articles on sensitive topics (allocation of powers, exit, remuneration) without exposing them to third parties.
Is a shareholders agreement mandatory?
No, but it is strongly recommended as soon as a company has several partners or takes on investors. Its absence is one of the leading causes of deadlock and disputes between partners.
What happens if a partner breaches the agreement?
Unlike the articles, breach of an agreement does not automatically void the act: it mainly gives rise to damages. This is why careful drafting of remedies (penalty clause, transfer undertakings, specific performance) is decisive in making the agreement truly effective.
How long does a shareholders agreement last?
An agreement cannot be concluded for a perpetual term. It is generally concluded for a fixed renewable term, or for as long as the parties remain partners. The firm ensures its duration is secured to avoid any untimely unilateral termination.