A company constitution sets the baseline rules, but it rarely answers the operational questions that cause founder disputes. A shareholders agreement fills that gap by documenting rights, expectations, and exit mechanisms—often determining whether a disagreement becomes a controlled transition or a value-destroying conflict.

Key provisions commonly include: governance (reserved matters requiring shareholder consent), funding (how future capital is raised and what happens if a shareholder cannot contribute), and dividend policy. Where founders work in the business, the agreement should align with employment or contractor arrangements to avoid mismatched incentives and uncertain termination outcomes.

The most valuable clauses are usually those addressing exits and deadlocks. Pre-emptive rights control who can buy shares if someone wants to sell. Drag-along and tag-along rights manage sale scenarios, protecting both majority and minority shareholders. Deadlock mechanisms (escalation, mediation, casting votes, put/call options) provide a pre-agreed pathway when decision-making stalls.

Risk management clauses also matter: restraints(reasonable non-compete/non-solicit), confidentiality, and intellectual property ownership—particularly where founders developed assets before incorporation. In Queensland, careful drafting tailored to the business model and shareholder dynamics can materially reduce dispute risk and improve bankability and investor confidence.