Shareholders’ agreement for founders: the decisions that protect the venture

A shareholders’ agreement — in Spain, the pacto de socios, the private contract signed between the shareholders of a company alongside its articles of association — sets down in writing the key decisions between people going into business together: how the equity is split, how long each founder stays and how investors come in and go out, all before any dispute arises. This guide runs through the decisions that genuinely matter to a founder; how the Spanish Supreme Court treats the enforceability of these clauses is examined in a companion piece.

Splitting the equity without living to regret it

The most common mistake is to split the equity 50/50 “because we are friends”. A perfectly equal split condemns the company to deadlock as soon as a disagreement arises, because no one can break the tie. The split should reflect each shareholder’s actual contribution — capital, time, know-how, client base — leave a margin for future key employees and for the investor who will eventually come in, and record in writing who contributes what and in exchange for how much.

Locking in the team: commitment, exclusivity and vesting

In a young company the value lies in its founders, so the agreement must make sure that those who build it stay with it.

• Commitment and exclusivity. Each shareholder takes on defined responsibilities and a commitment of dedication, together with a non-compete covenant for the term of the agreement and a period thereafter, and a non-solicitation covenant covering clients and employees.
• Vesting. The stake accrues over time. A common structure is four years with a one-year cliff. A founder who leaves before then is required to transfer the unvested portion at a price agreed in advance: whoever stops contributing also stops sharing in the value the others create.

Governing who comes in and who goes out

The agreement regulates the transfer of shares so that no one is trapped and no one can force an unfair outcome:

• Lock-up. An initial period — three years is usual — during which no shareholder sells.
• Pre-emption rights. Before selling to a third party, a shareholder must offer the shares to the others on the same terms.
• Tag-along. If a shareholder sells a controlling stake, minority holders may join the sale on identical terms.
• Drag-along. Conversely, a qualified majority may compel the others to sell when an offer for 100% of the company arrives: this is what makes the company saleable.

Preventing deadlock before it happens

Two provisions make all the difference on the day a disagreement arises: reinforced majorities for structural decisions — so that no one decides the essentials alone — and a deadlock protocol that, faced with a persistent tie, forces a good-faith negotiation and, failing that, a decision by an independent expert. Without such a protocol, a single disagreement can paralyse the company indefinitely.

The costliest mistakes, and how we prevent them at RCM Legal

Four oversights account for most disputes: not signing the agreement, or signing it too late, when relations have already broken down and no one will give ground; copying a template without adapting it to the reality of the project and of the shareholders; not making it omnilateral — the fact that every shareholder signs is what gives it real force, as confirmed by the case law of the Spanish Supreme Court; and overlooking intellectual property, leaving what founders and employees create outside the company’s ownership.

Preventing precisely those mistakes is what we do every day: we advise founders from the very first decision — a considered split of the equity, the vesting and commitment clauses that protect the venture, and the rules on how shareholders come in and go out so that the company is governable and, when the time comes, saleable. If you are setting up your company or about to bring in a partner or an investor, tell us about your case.

The shareholders’ agreement is signed alongside incorporation: the full process is set out in our guide on setting up a company in Murcia.