Case study · Deals & structuring
A 50/50 management consultancy, made safe to grow
Two director–shareholders ran a UK management consultancy on trust and a handshake. We built the shareholders' agreement that turned that into an enforceable structure — control, ownership, IP and exit all defined before they were tested.
- 50/50
- Two founders, equal ownership
- ~80%
- Consent needed for major decisions
- 12 months
- Non-compete and non-solicit cover
- £1
- All IP assigned into the company
The risk
High trust. No structure.
With no agreement, decision-making could gridlock on a 50/50 split with nothing to break the tie. Either founder could transfer shares or simply disengage. IP was not clearly owned by the company. A departing founder could keep the full upside whatever the circumstances — and nothing stopped them taking clients, staff or the brand with them.
None of that is a problem while the relationship works. All of it is a problem the day it doesn't.
Before
Where the business started
Control
- No reserved matters or voting thresholds
- Equal ownership with no way to break a tie
Equity
- Shares freely transferable in practice
- No pricing mechanism, no protection from unwanted shareholders
Founder risk
- No good leaver / bad leaver distinction
- A departing founder could keep the full upside
IP
- Held individually or informally
- Value could walk out with a founder
Competition
- No enforceable non-compete or non-solicit
- Clients, team and brand exposed
Disputes
- No deadlock process
- Real risk of operational paralysis
After
Where the agreement took it
Control
- ~80% shareholder consent for key decisions
- Formal board process and a deadlock mechanism that escalates to exit
Equity
- Transfer restrictions and pre-emption rights
- Internal market for shares before any third-party sale
Founder risk
- Clear good leaver / bad leaver framework
- Forced transfer on exit, with economic consequences for misconduct
IP
- Past, present and future IP assigned to the company for £1
- Enforcement rights centralised
Competition
- ~12-month non-compete and non-solicit
- Brand, client and team protections
Disputes
- 14-day negotiation, then forced transfer
- Winding-up as the final fallback
The result
Upside shared. Downside managed.
The business moved from informal founder alignment to a legally enforceable structure — and from relationship-based trust to system-based control. Both founders still share the upside. What changed is that ownership, governance and exit now have mechanics, so a disagreement becomes a process rather than a crisis.
What's inside the agreement
Five layers: governance, ownership, value, enforcement, resolution
Both founders sit as directors with equal voting power and no casting vote, so parity is real rather than nominal. A supermajority of around 80% is required for share issues, major contracts (~£50k+), borrowing above ~£10k, structural changes and IP licensing. At least two formal board meetings a year, with agendas, minutes and information rights.
All materials — past, future and jointly created — are assigned to the company for nominal value, with moral rights waived, an obligation to perfect assignments and a power of attorney in the company's favour. That keeps the value where investors and buyers expect to find it, and stops IP leaving with a founder.
Transfers are restricted unless permitted or board-approved, and any incoming holder signs a deed of adherence. A seller must offer shares internally first; only unsold shares can go to a third party, and the board can block a competitor. Limited permitted transfers (family, wholly owned entities) keep some personal flexibility.
An independent accountant sets fair value on an arm's-length, going-concern basis with no control premium or discount — so the price on an exit is a process, not an argument.
A good leaver takes the higher of fair value or nominal; a bad leaver takes the lower. A material breach triggers a forced transfer on bad leaver terms, the company can execute the transfer, and voting rights are suspended immediately so the business keeps moving during an exit.
Deadlock is defined, not left to chance: formal notice, a ~14-day negotiation window, then either party can trigger the share transfer process, with winding-up as the ultimate fallback. The point is not to use it — it's to make cooperation the cheaper option.
No competing, and no soliciting customers, staff or suppliers, during ownership and for around 12 months after exit. Brand usage is restricted and commercial information stays confidential.
Standard infrastructure that makes the commercial mechanics enforceable: variation at ~90% consent, termination triggers, no-partnership and assignment provisions, conflict with the articles, severance, and schedules covering shareholdings, reserved matters and the deed of adherence. Governed by English law, England & Wales courts.
What this actually costs
Three levels, priced up front
Light
£990 ex VAT
A simple shareholders' or founders' agreement: who owns what, basic decision-making, simple exit provisions.
Early-stage founders who trust each other and want something sensible in place.
Mid
£1,237 – £1,980 ex VAT
Clearer governance, more robust exit rules, better transfer controls and a working good/bad leaver framework, with advice on ownership, governance and IP.
Growing businesses starting to scale, bring in partners or think about investment.
Complete
£2,475 – £4,970+ ex VAT
A fully bespoke, strategically structured agreement built around your specific risks, dynamics and future plans, with advice on the critical legal elements of operating the business.
The tier this case study sits in.
What does your business need next?
No complicated brief required. Start with the problem.