NZ Company Shareholder Agreement: Why You Need One From Day One (2026)

What is a shareholder agreement and why does it matter?

A shareholder agreement is a private contract between the owners of a company that sets out how the business will be run, how decisions get made, and what happens when things go wrong. Unlike the company constitution (which is a public document filed with the Companies Register), the shareholder agreement is confidential and can cover anything the shareholders agree to.

In New Zealand, companies are governed by the Companies Act 1993 by default. Without a shareholder agreement, the Act fills the gaps, and the default rules may not reflect what you and your co-founder actually agreed to over coffee. A formal agreement replaces those gaps with your own terms.

What a shareholder agreement typically covers

• Decision-making rights: which decisions require unanimous agreement vs a simple majority, and which one director can make alone.
• Shareholder loans and capital contributions: what happens if the company needs more money and one shareholder can contribute but the other cannot.
• Salary and drawings: how much each director-shareholder can take from the company and how that is approved.
• Share transfer restrictions: can a shareholder sell their shares to anyone, or do other shareholders get first right of refusal (a right of pre-emption).
• Valuation mechanism: how shares are valued if a shareholder wants to exit or is bought out.
• Death and disability: what happens to the shares if a shareholder dies or is unable to work, and whether key-person insurance is required.
• Restraint of trade: whether a departing shareholder can start a competing business, and for how long.
• Dispute resolution: a mediation or arbitration clause before the parties go to court.

The three situations where no shareholder agreement causes the most damage

Deadlock between 50/50 shareholders. Two founders each own half the company. One wants to hire staff. The other disagrees. Under the Companies Act default rules, neither can force the decision through. Without a deadlock mechanism in the shareholder agreement (such as a casting vote for the chair or a mandatory mediation process), the company can become paralysed.

A shareholder wants to exit. Without a pre-emption clause and a clear valuation method, a departing shareholder can sell their shares to anyone, including a competitor. The remaining founders have no right to buy those shares at a fair price.

A shareholder stops contributing but keeps their shares. Without vesting provisions or a good leaver or bad leaver mechanism, a co-founder who leaves after six months keeps the same equity as someone who stayed for five years.

When should you sign a shareholder agreement?

The answer is before you incorporate, or at the same time. The longer you wait, the harder it becomes. In the early days of a startup, everyone is optimistic and cooperative, and negotiations are straightforward. After the company has real value, every clause becomes a negotiation about money.

If your company is already incorporated and you do not have a shareholder agreement, sign one now. The conversation is awkward but far easier than the alternative.

How much does a shareholder agreement cost?

A standard NZ shareholder agreement from a commercial law firm typically costs NZ$1,500 to $4,000 depending on complexity. Some firms offer fixed-price startup packages that bundle the shareholder agreement with the company constitution, employment agreements for the directors, and initial legal advice.

Online templates exist but are a poor substitute. The value of a shareholder agreement is in the precise wording of the dispute resolution, valuation, and exit clauses, which require a lawyer who understands your specific situation.

Finding a lawyer for your shareholder agreement

Commercial law firms that work with startups and small businesses in New Zealand include many that offer startup packages with fixed pricing. Look for a firm that asks about your industry, your shareholding structure, and whether you plan to raise investment, as those factors significantly affect the agreement you need.

FreshFirms Connect lets you request a referral to a commercial lawyer in your region who works with new NZ companies. Submit a request here and a matched professional will contact you directly.

If you are a lawyer or legal services provider looking to reach new NZ companies in their first 30 days, FreshFirms alerts you the moment a new company registers in your region, with director contact details and industry classification.