How Much Does A Shareholders Agreement Cost?

How much should you budget for a shareholders agreement? The honest answer is that it depends on how your company is set up, how many people are involved, and how much tailoring your agreement needs.

As a rough guide in Australia, a simple lawyer drafted shareholders agreement for a straightforward company may often sit somewhere around $1,000 to $2,500 plus GST. A more tailored agreement with extra drafting, negotiation or review of related documents may sit around $2,500 to $5,000 plus GST. More complex matters involving investors, vesting, different share classes, fundraising or detailed founder exits can cost $5,000 plus GST or more.

Those figures are only a practical guide, not a fixed rule. There's no standard price for every company because the work depends on your shareholders, structure, commercial deal and risk points. The best way to get a reliable quote is to explain who owns what, what each person is contributing, whether anyone is investing or leaving, and whether you already have a draft or constitution that needs to be checked.

The reassuring part is that not every business needs a lengthy, heavily negotiated document. If you're a new company with two or three shareholders and a simple ownership structure, a more straightforward agreement may be enough to get you protected from day one.

But if there are investors, sweat equity, unequal contributions, share vesting, future fundraising plans or sensitive exit arrangements, it's usually worth spending more on bespoke drafting now so you don't pay for confusion later.

How Much Does A Shareholders Agreement Cost In Australia?

A shareholders agreement cost in Australia usually depends on the level of legal work involved, rather than a standard government fee.

There isn't an ASIC filing fee for signing a shareholders agreement. Unlike registering a company or lodging certain company changes, your shareholders agreement is a private contract between the company and its shareholders. It generally doesn't get lodged with ASIC.

That means the main cost is the legal drafting, review and advice. In practice, you'll usually see three options:

• A free or low cost template: This may help you see the kinds of topics a shareholders agreement covers, but it may not fit your company, your share structure or the way decisions will actually be made.
• An online fixed fee legal service: This can work well where you want a lawyer drafted agreement and clear pricing before work starts. The provider should quote a fixed fee up front, so you know what you're agreeing to before you go ahead.
• A traditional law firm charging by the hour: This may be suitable for complex negotiations, investors or unusual structures, but the final cost can be harder to predict if the scope keeps changing.

Some people search for a business partner agreement cost when they really mean a shareholders agreement. If you're running a Pty Ltd company with shares, you're usually talking about a shareholders agreement. If you're not using a company structure, you may need a partnership agreement, unitholders agreement or another type of contract instead.

What Drives The Cost Of A Shareholders Agreement?

The cost is mainly driven by complexity, negotiation and risk.

A lawyer isn't just filling in names and percentages. They're working out how the agreement should deal with control, money, exits, deadlocks, future investors and what happens if things change. The more moving parts you have, the more time it takes to get those details right.

Factors That Usually Make The Agreement Simpler

• You have two or three shareholders.
• Everyone is contributing money in a clear amount.
• Shares are already agreed and easy to record, such as 50/50 or 60/40.
• All shareholders are active in the business and have similar expectations.
• You don't have external investors yet.
• You only need standard rules for decision making, share transfers and exits.

Factors That Usually Add Complexity

• One person contributes money while another contributes unpaid labour or IP.
• You want vesting, leaver provisions or performance milestones.
• You have investor rights, founder rights or different share classes.
• You need detailed deadlock rules because voting power is evenly split.
• You're raising capital soon and want the agreement to support that plan.
• You already have a template and need a shareholders agreement review before signing.

The Corporations Act 2001 also matters here. Your company has a constitution or may rely on the replaceable rules in the Corporations Act. Your shareholders agreement needs to work alongside those rules, not accidentally contradict them.

If the agreement says one thing and the constitution says another, you can end up with uncertainty about which rule applies. That uncertainty is often where disputes start.

When Is A Simple Shareholders Agreement Enough?

A simple shareholders agreement may be enough if your ownership, contributions and decision making are clear and low risk.

For example, say Mia and James start a small online education company through a new Pty Ltd company. They each contribute $20,000, each hold 50 ordinary shares, and both will work full time in the business. They agree that daily decisions can be made by either of them, but major decisions need both of them to agree.

In that kind of setup, a simpler agreement might focus on:

• who owns what percentage of the company
• what each person is expected to contribute
• how directors and shareholders make decisions
• what happens if one person wants to sell their shares
• what happens if one person leaves the business, including any share vesting rules
• how confidential information and company IP are protected
• how deadlocks are handled if they can't agree

That doesn't mean the agreement should be generic. Even a simple agreement should match your company details, share structure and practical working relationship.

The key question is whether the standard clauses actually solve your real risks. If you and your co founder have equal voting power, the deadlock clause needs to be practical. If one person created software, branding or course materials before the company was set up, the agreement should deal with ownership or assignment of that IP.

Simple can be perfectly fine. Vague is the problem.

When Do You Need Bespoke Drafting?

You usually need bespoke drafting when the agreement needs to do more than record basic ownership and voting rules.

This often happens in startups, family businesses, businesses with silent investors, or companies where different people are contributing different things. The more valuable the business becomes, the more expensive an unclear agreement can feel.

Startup Example With Real Numbers

Say Priya, Tom and Alex start a software company in Melbourne. Priya invests $60,000 cash and works full time. Tom builds the first version of the platform and contributes existing code. Alex invests $40,000 but won't work in the business day to day.

They agree on the following share split:

• Priya: 45%
• Tom: 35%
• Alex: 20%

At first, that looks simple. But the real questions are more detailed:

• Does Tom's 35% vest over time because his main contribution is ongoing work?
• Who owns the pre existing code Tom brought into the company?
• Can Alex block a future capital raise?
• What decisions need 75% approval rather than a simple majority?
• What happens if Priya leaves after 12 months?
• Can a shareholder sell shares to a competitor?

If the agreement doesn't answer those questions, the company may struggle when something changes. For example, if Tom leaves after 6 months and keeps all of his shares, Priya may feel the split no longer reflects everyone's contribution. If the code wasn't properly assigned to the company, investors may also ask difficult questions during due diligence.

In this kind of scenario, bespoke drafting is usually worth it. The agreement needs to be built around the commercial deal, not just the company name and share percentages.

What Should Be Included In The Cost?

The cost should include more than a document being emailed to you at the end.

When you're comparing options, look at what you're actually getting. A cheaper option can become expensive if it leaves you with an agreement you don't understand, can't use, or need to redo before an investor, lender or buyer will take you seriously.

A well scoped shareholders agreement process will usually involve:

• Initial fact finding: The lawyer should understand your company, shareholders, share structure, contributions and plans.
• Tailored drafting: The agreement should reflect your ownership, voting rights, transfer rules, confidentiality needs and exit arrangements.
• Advice on key choices: You should know the practical difference between options, such as unanimous approval, majority approval or special approval thresholds.
• Consistency checks: The agreement should be checked against your company constitution, ASIC records and any existing founders, investor or shareholder loan documents.
• Reasonable revisions: You may need changes after your co founders or investors review the draft.
• Signing guidance: You should know who signs, in what capacity, and what records to keep with your company documents.

You should also ask what isn't included in the legal service agreement. For example, a shareholders agreement may not include issuing new shares, updating your company constitution, assigning IP, preparing director service agreements or documenting a capital raise. Those might be separate pieces of work.

Clarity on scope helps you compare quotes properly. Two quotes can look very different because one includes advice and revisions, while the other only includes a first draft.

Can You Use A Free Template Or Should A Lawyer Review It?

You can use a template as a starting point, but a lawyer should tailor or review it before you rely on it.

Templates can be useful for learning the structure of a shareholders agreement. They can also help you have the right conversations with your co founders before legal drafting starts. The risk is that a template may include clauses you don't understand, leave out clauses you need, or clash with your constitution.

If you already have a draft, a shareholders agreement review can be a sensible middle ground. Instead of starting from scratch, a lawyer can check whether the agreement matches your company and flag the parts that need work.

Fill In Outline To Prepare Before Speaking To A Lawyer

This outline isn't a finished legal document. It's a practical way to organise your thoughts so a lawyer can tailor the agreement properly.

1. Company Details: Write the company's legal name, ACN, registered office and business name if you trade under one.
2. Shareholders And Shares: List each shareholder, their shareholding percentage and the class of shares they hold.
3. Contributions: Note who is contributing cash, assets, IP, unpaid work, industry contacts or other value.
4. Roles And Time Commitments: Set out who will work in the business and whether anyone is a passive investor.
5. Decision Making: Decide which decisions can be made day to day and which need shareholder approval.
6. Reserved Matters: List major decisions, such as issuing shares, borrowing money, selling key assets or changing the business direction.
7. Share Transfers: Set rules for selling shares, rights of first refusal and transfers to related entities.
8. Leavers: Decide what happens if someone resigns, is removed, becomes ill or stops contributing.
9. Deadlocks: Choose a process for resolving serious disagreements, especially in 50/50 companies.
10. Confidentiality And IP: Record how business information, software, branding, content and inventions will be protected.
11. Future Funding: Note how loans, capital raises and dilution will be handled.
12. Signing And Records: Confirm who signs and where the final agreement will be stored with your company records.

If you're tempted to sign a template because everyone is getting along, pause for a moment. A shareholders agreement is most useful when people don't agree later. That's why the details matter.

How Should You Budget For A Shareholders Agreement?

You should budget based on the value of getting the rules clear before money, effort and ownership become harder to unwind.

Instead of looking only for the lowest upfront price, think about what you're trying to protect. Your agreement may cover ownership of the company, control of major decisions, access to future funding, founder exits and the value of your shares.

A practical budgeting process looks like this:

1. Map Your Structure: Confirm whether you're using a Pty Ltd company, who the shareholders are, and whether ASIC records match your plan.
2. List The Commercial Deal: Write down each person's money, time, assets and IP contributions.
3. Identify Your Risk Points: Focus on deadlocks, exits, investor rights, vesting, share transfers and future fundraising.
4. Decide How Much Tailoring You Need: A simple company may only need a straightforward agreement, while a startup with investors or sweat equity may need bespoke drafting.
5. Compare Scope, Not Just Price: Check whether quotes include advice, drafting, revisions, review of related documents and signing guidance.
6. Get It Done Before Pressure Builds: It's much easier to agree on rules before there's a dispute, investor deadline, business sale negotiation or other pressure point.

For many businesses, the real cost question isn't just what the agreement costs today. It's what it could cost if you don't have clear rules when someone wants out, stops contributing, or blocks a decision the company needs to make.

That doesn't mean you need the most complex agreement available. It means your agreement should fit your business as it actually operates.

Key Takeaways

• A shareholders agreement doesn't usually have an ASIC filing fee. The cost is mainly for legal drafting, review and advice.
• As a practical guide, simple agreements may cost around $1,000 to $2,500 plus GST, while more tailored or complex agreements can cost $2,500 to $5,000 plus GST or more.
• Simple agreements can work well for straightforward companies with clear ownership, contributions and decision making.
• Bespoke drafting is usually needed where there are investors, sweat equity, vesting, different contributions, deadlock risks or future fundraising plans.
• Templates can help you prepare, but they should be tailored before you sign because they may not match your company or constitution.
• When comparing quotes, check what is included, such as advice, revisions, consistency checks and signing guidance.

If you'd like help with your shareholders agreement, reviewing a draft before you sign, tailoring founder arrangements or checking your company setup, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.