This is not a contract and nobody should sign it. It is a brief. Take it to a solicitor, they draft the real agreement from it, you both sign that.
Doing it this way round is deliberate: solicitors charge by the hour, and most of that hour normally goes on working out what you actually want. That part is already done here.
Why this matters more than the incorporation
Registering at Companies House records who owns what percentage and nothing else. It is silent on every question that actually causes problems: what happens when one of you wants out, who owns the code, whether profits get paid out or reinvested, and who decides.
Sorting it now takes an afternoon and costs a few hundred pounds. Sorting it after a disagreement costs thousands and usually ends the business. Do it before the first client pays.
The terms
Parties and shareholding
Macka: 51 ordinary £1 shares (51%). Andrés: 49 ordinary £1 shares (49%). Macka is sole director. Andrés is a shareholder only, with no director role and no director duties.
The split is deliberate, and it's worth both of you understanding what it means in practice:
| Decision type | Needs | So in practice |
|---|---|---|
| Ordinary resolutions (most day-to-day company decisions) | over 50% | Macka decides. The company can actually be run |
| Special resolutions (changing the articles, changing share capital, winding the company up) | 75% | Neither can do it alone. Andrés's 49% blocks structural changes |
That balance is the whole point of 51/49 rather than 50/50: one of you can run the business, but neither can restructure it over the other's head.
Intellectual property — the most important clause here
The Web Express engines, templates, build tooling and existing codebase belong to Andrés and pre-date this company. They are licensed to the company to use, not transferred into it.
The agreement should say plainly:
- Background IP — anything either party owned or built before the company existed stays theirs
- Foreground IP — anything built specifically for a company client, and paid for by the company, belongs to the company (and passes to that client on their final payment, per the client contract)
- The company gets a licence to use the background IP for its own client work, for as long as the agreement runs
- What happens to that licence if the company is wound up or one of you leaves
Without this clause, there is a genuine argument years from now about whether the tooling ended up owned by the company — which would mean Andrés no longer solely owns the thing he built before any of this started. It protects both of you to have it written down while everyone is friendly.
How money moves
Three separate flows, and they should not get mixed up:
| Flow | What it is | When |
|---|---|---|
| Andrés invoices the company | Payment for work done — development, audits, systems. A normal supplier cost to the company | Per project or monthly |
| Macka's salary | Director's salary through payroll | Monthly |
| Dividends | Share of profit, split 51/49 | When declared |
Why Andrés invoices rather than only taking dividends: dividends only exist if there's profit left at year end and only if they're declared. If that were his only route, he'd be working all year on the hope of a decision he doesn't control. Invoicing for the work means he's paid as a supplier, which is both fairer and cleaner for tax on both sides.
The rates for Andrés's work should be written down, or at least the method for setting them, so it isn't renegotiated every project.
Dividend policy
Declaring a dividend is normally the director's call. With one director, that means Macka could in theory decide never to declare one, and Andrés's 49% would be worth nothing in cash terms.
Nobody thinks that will happen, which is exactly why it's easy to agree now: set a policy. Something like a stated percentage of post-tax profit distributed annually once an agreed working-capital buffer is retained. Any departure from it needs both shareholders to agree.
Decisions that need both of you
A short list of reserved matters that Macka cannot do alone despite holding 51%:
- Issuing new shares or bringing in a third shareholder
- Taking on debt or giving guarantees above an agreed figure
- Selling the business or its main assets
- Changing the nature of what the business does
- Any contract above an agreed value, or lasting beyond an agreed term
- Changing the dividend policy or Andrés's agreed rates
- Anything involving the licensed background IP
Keep the list short. Too many reserved matters and the company can't function, which defeats the point of 51/49.
Whose clients are whose
This will come up, so decide it now rather than in an argument:
- UK clients that the company signs belong to the company
- Web Express Peru's existing clients stay with Andrés and are nothing to do with the company
- What happens if a Peru client wants UK work, or a UK client wants work in Latin America
- Whether Macka can take on web or software work outside the company, and if so under what conditions
Also worth agreeing a non-solicitation period: for a set time after leaving, neither party approaches the company's clients directly.
If someone wants out
- Pre-emption rights: anyone selling shares must offer them to the other first, before any outsider
- Valuation method written down now — a multiple of profit, or an independent valuer. Agreeing the method in advance is what stops the argument later
- Payment terms — a small company rarely has the cash to buy out a shareholder in one go, so allow instalments
- Good leaver / bad leaver: someone who leaves on decent terms is treated differently from someone who walks out mid-project or competes against the company
- Death or long-term incapacity — otherwise shares end up with someone's family who has no involvement in the business
Deadlock
51/49 solves most deadlock, but not on the 75% decisions. Set out an escalation: a fixed cooling-off period, then a conversation, then mediation, and only as a last resort a buy-out mechanism. Write it while you get on.
Protecting the director
Macka is sole director, so he carries duties under the Companies Act that a shareholder simply doesn't. Andrés, holding shares only, carries none of them. That asymmetry is real and it should be paid for by the company, not absorbed by one person.
Two things go in:
- A director's indemnity from the company. Section 234 of the Companies Act 2006 lets a company indemnify a director against liability to third parties — negligence, default, breach of duty — including legal costs. It cannot cover criminal fines, regulatory penalties, or liability owed to the company itself, but it covers the realistic scenarios.
- Directors' and officers' insurance, paid for by the company. It's expressly permitted, it's cheap at this size, and it picks up things the statutory indemnity can't.
Also worth writing down explicitly: neither party signs a personal guarantee for company borrowing without the other agreeing in writing. Personal guarantees are the single most common way people lose the protection they incorporated to get.
Confidentiality and governing law
Standard mutual confidentiality covering client information, pricing and the codebase. Governed by the law of England and Wales, with the English courts having jurisdiction — the company is English and that is where any dispute would realistically be heard.
What to do with this
- Both read it and agree the numbers that are still blank: Andrés's rates, the dividend percentage, the working-capital buffer, the contract value that triggers a reserved matter, and the non-solicitation period.
- Send it to a solicitor in Liverpool who does commercial work. Say it's heads of terms for a two-shareholder agreement for a new company and ask for a fixed fee.
- Both sign the drafted agreement. Ideally the same week the company is incorporated, and certainly before the first client money lands.
None of this is because anyone distrusts anyone. It is the opposite — agreeing all of it now, while there is nothing at stake and you both want the same thing, is the easiest this conversation will ever be. Every month you wait it gets slightly harder, and after the first big invoice it gets a lot harder.
Prepared by Web Express, 16 August 2026. These are heads of terms for discussion and for instructing a solicitor. They are not a contract, not legal advice, and should not be signed as they stand. Have the resulting agreement drafted or reviewed by a solicitor qualified in England and Wales before either party signs.