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Limited Company Agreement for the United Kingdom

Limited Company Agreement Template for England and Wales

A Limited Company Agreement under English and Welsh law is a fundamental document that establishes the governance framework for a limited company. It sets out the relationships between shareholders, defines management structures, establishes share rights and transfer procedures, and outlines key operational processes. This agreement is crucial for both new and existing companies, providing clarity on decision-making processes and protecting stakeholder interests while ensuring compliance with UK company law.

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What is a Limited Company Agreement?

The Limited Company Agreement serves as the cornerstone document for companies registered in England and Wales, typically implemented during company formation or when existing arrangements need updating. It provides comprehensive coverage of shareholding structures, management responsibilities, and operational procedures, while ensuring compliance with the Companies Act 2006 and related legislation. This agreement is essential for protecting shareholder interests, preventing disputes, and establishing clear governance frameworks for company operations.

What sections should be included in a Limited Company Agreement?

1. Parties: Identification and details of all parties to the agreement

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Share Capital: Details of company's share structure and classes

5. Directors and Management: Appointment, removal, and powers of directors

6. Shareholders' Rights and Obligations: Key rights and responsibilities of shareholders

7. Transfer of Shares: Procedures and restrictions for share transfers

8. General Meetings: Procedures for conducting company meetings

What sections are optional to include in a Limited Company Agreement?

1. Dividend Policy: Specific arrangements for dividend distributions - include when shareholders want specific dividend arrangements

2. Tag-Along Rights: Rights of minority shareholders to join in sale of shares - include when protecting minority shareholders

3. Drag-Along Rights: Rights of majority shareholders to force minority participation in sale - include when facilitating potential future sale

What schedules should be included in a Limited Company Agreement?

1. Schedule 1: Details of Shareholders: List of all shareholders and their shareholdings

2. Schedule 2: Reserved Matters: Decisions requiring special majority or unanimous consent

3. Schedule 3: Share Transfer Forms: Template forms for share transfers

4. Appendix A: Initial Business Plan: Company's initial business strategy and projections

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Ƶ

Document Type

Operating Agreement

Sector

Sales

Cost

Free to use
Relevant legal definitions


































Clauses






























Industries

Companies Act 2006: Primary legislation governing company formation, operation, and regulation in the UK, including statutory duties of directors, shareholder rights, and corporate governance requirements

Small Business, Enterprise and Employment Act 2015: Legislation aimed at reducing barriers to small business growth and ensuring transparency in company ownership and control

Corporate Insolvency and Governance Act 2020: Recent legislation providing frameworks for corporate restructuring and governance, particularly relevant during financial difficulty

Company Names and Trading Disclosures Regulations 2015: Secondary legislation detailing requirements for company naming conventions and business disclosure obligations

Companies (Model Articles) Regulations 2008: Provides standard default articles of association for different types of companies in the UK

Company (Trading Disclosures) Regulations 2008: Specifies requirements for how companies must display and communicate their registered name and other company details

UK Corporate Governance Code: Set of principles and guidelines for good corporate governance practices in UK companies

Financial Services and Markets Act 2000: Regulatory framework for financial services companies and markets in the UK

Bribery Act 2010: Anti-corruption legislation that affects how companies must prevent and handle bribery and corruption

Modern Slavery Act 2015: Requires larger companies to ensure transparency in supply chains and prevent modern slavery practices

General Data Protection Regulation (GDPR): EU regulation incorporated into UK law governing data protection and privacy requirements for organizations

Data Protection Act 2018: UK's implementation of data protection standards, working alongside GDPR

Common Law Precedents: Body of case law establishing principles and precedents regarding company operations, directors' duties, and shareholder rights

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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