Investment and Shareholders Agreement: established business multiple investors

Name: Investment and Shareholders Agreement Template - Paper Rock Docs
SKU: INV006.001
Price: 95.00 GBP
Availability: InStock

Combined investment and shareholders agreement for the investment by multiple investors in an established business. The agreement covers the investment transaction and also acts as the shareholders agreement between the investors and the founders of the company.

for an investment by multiple investors in an established business
as a combined subscription and shareholders agreement
for full-form warranties to reflect the trading history of the company and any subsidiaries
in conjunction with new Articles of Association – for Paper Rock’s accompanying Articles of Association, see Articles of Association – established business multiple investors
for investment in a private limited company incorporated in England and Wales

What are the key features?

full form investment/subscription and shareholders agreement (ISHA)
31 clauses and 5 schedules over 46 pages
subscription: mechanism and terms for the subscription for shares by the investors
conditions: conditions to the closing of the investment (if applicable)
completion: completion of the investment, including the issue of shares to the investors and payment by the investors
warranties: warranties from the company and, if agreed, the founder shareholders
limitations on liability: limitations on potential liability under the warranties of the company and, if giving warranties, the founders
investor rights: exercisable by a majority of the investors
directors:
- investor director: investors’ entitlement to appoint a director
- other directors: the founder shareholder(s) rights to appoint a director
board proceedings: how proceedings of the board will be conducted
future share issues: pre-emption rights on the issue of new shares
share transfers: rules governing the transfer of shares, including:
- pre-emption rights on share transfers
- compulsory transfer events, including founder good and bad leaver clauses
- tag-along and drag-along rights
reserved matters: matters requiring prior approval from the investors (acting by investor majority) and other shareholders
information rights: rights to information for the investors and other shareholders about the company and its finances
restrictive covenants: restrictions on the founders from competing with the company andsoliciting the company’s customers, suppliers and employees

What other documents are available?

For separate documents consisting of a Subscription Agreement and Shareholders Agreement for investment by multiple investors in an established business, see

For a combined Investment & Shareholders Agreement for an established business with a single investor, see

Investment and Shareholders Agreement – established business single investor

For combined Investment & Shareholders Agreements for a start up business, see

Description

When do I use this document?

where one or more shareholders wish to remove a director
where the Articles of Association do not include a simpler removal process
as special notice pursuant to the Companies Act 2006 to remove a director

Key features

special notice required to remove a director from office
including an ordinary resolution to remove a director, for use by either a single shareholder or multiple shareholders
alternative forms covering:
- removal of director only
- removal of director and appointment of replacement director

What else do I need to know?

Under section 168 of the Companies Act 2006, shareholders can remove a director by passing an ordinary resolution at a general meeting. This decision cannot be made by written resolution. The shareholder proposing the removal must give formal notice to the company. The Articles of Association cannot override this statutory process or change the notice periods required for the process.

Once the company receives special notice, the board must call a shareholder meeting. This meeting must take place at least 28 days after the notice is received. The director facing removal has the right to submit written representations, which the company must circulate to shareholders before the meeting.

The special notice may also propose appointing a new director to replace the one being removed.

In some companies, weighted voting rights can protect shareholder-directors being removed from office by granting them extra votes on removal resolutions. This is common in joint ventures, multi-shareholder businesses, or investor agreements where director rights need protection.

Being removed as a director does not affect employment rights, but it may lead to legal claims, such as wrongful dismissal. If the removed director is also a shareholder, they may claim unfair prejudice under the Companies Act 2006 – particularly in quasi-partnerships, where they expected to be involved in management. If the claim succeeds, the court may order other shareholders to buy their shares at fair value.

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£95.00 exc VAT

Updated by a lawyer on 02/07/2025

Updated By a lawyer on 04/27/2023

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Investment and Shareholders Agreement: established business multiple investors