Business Setup

Shareholders Agreement -- Established SME

A Shareholders Agreement for established SMEs. Covers dividend policy, share transfers, director appointments, and dispute resolution for growing businesses.

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Drafted to comply with Kenyan law and international common law standards.

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What this document covers

Shareholders and their equity percentages
Dividend policy
Director appointment rights
Reserved matters
Share transfer restrictions and right of first refusal
Deadlock resolution mechanism
Exit provisions
Non-compete obligations
Governing law (Companies Act 2015)

Frequently Asked Questions

What key provisions should a shareholders agreement for an established SME include?
Key provisions: share transfer restrictions (right of first refusal, pre-emption rights), dividend policy, director appointment rights, reserved matters (decisions requiring shareholder approval), deadlock resolution mechanisms, and drag-along/tag-along provisions for exit.
Can a shareholders agreement override the company's Articles of Association in Kenya?
A shareholders agreement is a private contract between shareholders. If it conflicts with the Articles, the Articles (which are a public document and part of the company's constitution) will prevail in most circumstances. For key provisions to be fully effective, they should also be reflected in the Articles.
Is an SME shareholders agreement valid internationally?
Yes. The core commercial provisions (pre-emption, drag-along, dividend policy) are recognised across all common law jurisdictions. For cross-border SME shareholders, consider which country's company law governs (based on where the company is incorporated) and ensure the agreement is consistent with it.