Shareholder Agreement Template (South Africa)
Set out how a South African company is owned, governed and managed with a plain-English shareholders' agreement between the shareholders and the company
Preview
A South African shareholders' agreement you can customize and download in minutes
A shareholders' agreement is the contract the owners of a company sign to record how the company will be owned, governed and managed, and to regulate their relationship as shareholders. This template is a standard, plain-English format for South African companies, drafted around the Companies Act 71 of 2008 and CIPC practice. It is entered into under section 15(7) of the Act, so it is designed to work alongside the company's Memorandum of Incorporation (MOI) - where they conflict, the Act and MOI prevail, and the shareholders agree to align the MOI where needed.
Just answer a few simple questions - the company and its business, the shareholders and their shareholdings, the board and voting thresholds, the distribution policy and the arbitration seat — and your personalized shareholders' agreement is generated instantly, with a shareholding schedule, ready to download as PDF or Word.
What this shareholders' agreement includes
- Clear identification of the Shareholders (up to four named parties) and the Company (private company / (Pty) Ltd, with registration number and registered office)
- The share capital and shareholding in ordinary no par value shares, with a Schedule 1 cap table and a pre-emptive right on new share issues
- The Board of Directors - size, each qualifying shareholder's right to appoint a director, quorum and voting
- Shareholders' meetings and voting, and a list of Reserved Matters requiring a Special Resolution (special majority)
- Funding (including shareholder loans), a distribution / dividend policy subject to the solvency and liquidity test, and clear rules on restrictions on transfer and pre-emptive rights (right of first offer)
- Tag-along (come-along) and drag-along rights, and a permitted-transfers clause with a deed of adherence
- A deadlock procedure, confidentiality, and a restraint of trade / non-solicitation clause drafted to be reasonable and enforceable
- Term and termination, the relationship with the MOI (section 15(7) - the agreement must be consistent with the Act and MOI), dispute resolution by arbitration under the Arbitration Act 42 of 1965, a domicilium notices clause, and a South African governing-law clause
- An execution block for each shareholder, the company and a witness
How to create your shareholders' agreement
1. Open the template and click Generate.
2. Answer the guided questions — the company and business, the shareholders and their shares, the board and voting thresholds, the distribution policy, and the arbitration seat.
3. Generate the document — your details are merged into the agreement and schedule automatically.
4. Review and download as PDF or Word, then have each shareholder and the company sign before a witness, and check the agreement against your MOI.
Who is this shareholders' agreement for?
Founders, co-owners, investors and small businesses setting up or reorganizing a private company ((Pty) Ltd) in South Africa who want to agree, in writing, how the company will be run and how shares can be transferred or exited. It suits two-to-four-shareholder companies and joint ventures, and is built to sit alongside the company's registered MOI.
Disclaimer: This template is provided for convenience and general information only and is not legal advice. Under section 15(7) of the Companies Act 71 of 2008, any provision of a shareholders' agreement that is inconsistent with the Act or the company's MOI is void to the extent of the inconsistency, so the agreement must be read together with your MOI. For companies with outside investors, B-BBEE requirements, unusual share classes or high-value arrangements, have the final agreement reviewed by a qualified South African attorney before signing.
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What's included
- Professional formatting and layout
- Easy customization with guided questions
- Multiple export formats: pdf, docx
- Standard clauses aligned with South African company law (Companies Act 71 of 2008)
- Instant download after generation
- Professional formatting and layout
- Easy customization with guided questions
- Multiple export formats: pdf, docx
- Legally reviewed and compliant
- Instant download after generation
What is a shareholders' agreement and why does a South African company need one?
A shareholders' agreement is a private contract between the owners of a company (and usually the company itself) that sets out how the company will be owned, governed and managed. In South Africa it is entered into under section 15(7) of the Companies Act 71 of 2008 and works alongside the company's Memorandum of Incorporation (MOI). It lets the shareholders agree matters the MOI may not cover in detail — board seats, the decisions that need a special majority, how shares can be sold, and what happens on a dispute or exit — reducing the risk of costly disagreements.
How does the agreement work with the company's MOI?
Under section 15(7) of the Companies Act, a shareholders' agreement must be consistent with the Act and the company's MOI, and any provision that is inconsistent is void to the extent of the inconsistency. So the MOI takes precedence: this template is drafted to sit alongside your MOI, and the shareholders agree to align the MOI where needed. It is important to read the agreement and your MOI together and fix any clashes.
Does this template comply with the Companies Act 71 of 2008?
It is drafted around the Companies Act and standard South African practice — for example distributions subject to the solvency and liquidity test (section 4), reserved matters by Special Resolution, the disposal-of-assets provisions (sections 112 and 115), and arbitration under the Arbitration Act 42 of 1965. It is a standard-tier template, so for companies with outside investors, B-BBEE requirements or multiple share classes you should still have an attorney tailor it.
How many shareholders can I add, and what shares does it use?
The template is built for a private company ((Pty) Ltd) with up to four named shareholders, each recorded in the Schedule 1 cap table with their own signature block, using ordinary no par value shares as under the 2008 Act. The body clauses refer to the "Shareholders" collectively, so the governance, transfer and exit rules work whether you have two, three or four owners.
What are reserved matters, pre-emptive, tag-along and drag-along rights?
Reserved matters are important decisions — like issuing shares, changing the MOI, or selling the business — that need a Special Resolution (a high percentage you set, 75% by default). Pre-emptive rights give existing shareholders the first offer of any shares being sold or issued. Tag-along lets a minority join a sale on the same terms if a majority sells; drag-along lets a large majority require the minority to sell on the same terms so a clean 100% sale can proceed.
Which law governs it, and how are disputes resolved?
The agreement is governed by the laws of the Republic of South Africa and is designed to work with the company's CIPC-registered MOI. Disputes go first to good-faith discussion and then to arbitration under the Arbitration Act 42 of 1965 at a seat (city) in South Africa that you choose, while still allowing a party to seek urgent interim relief from a court.
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