Do I have to follow the shareholders' agreement when buying out my co-founder?

Yes. Transfer restrictions, pre-emption rights and consent requirements in a shareholders' agreement or the articles apply to transfers between the existing shareholders as much as to outsiders. They can usually be waived by the people they protect, but the waiver should be documented.

What is corporate housekeeping?

Bringing a company's statutory records and filings up to date: the registers of members, directors and persons with significant control, board minutes and resolutions, share certificates, confirmation statements and any overdue Companies House filings. Investors and buyers check these first, so gaps cost time and credibility later.

Does the company own code written by overseas developers?

Only if the contracts say so. Copyright belongs to the author unless assigned in writing, and the rules on employee-created work differ between countries. A company with developers abroad should have written contracts with clear intellectual property assignments from each developer or contractor.

Buying out a co-founder in a tech company: share transfer under a shareholders' agreement, plus corporate housekeeping

A low-six-figure buyout of a departing founder in a London software company with developers in Ukraine, done in step with the existing shareholders' agreement and articles

By Malcolm Zoppi18 October 2026Technology and software

Key facts

Deal type: Corporate restructuring
Acting for: The remaining founder and the company
Business: Software development company, London, with a development team in Ukraine
Sector: Technology and software
Deal value: Low six figures
Structure: Transfer of the departing founder's shares to the remaining founder under the transfer provisions of the shareholders' agreement and articles; followed by board resolutions and filings to bring the company's records up to date
Timescale: A few weeks for the transfer; ongoing support afterwards
Completed: Late 2025
Lead solicitor: Malcolm Zoppi

At a glance

Two founders of a London software development company, with a development team based in Ukraine, agreed that one would buy the other out. We acted for the remaining founder on the share transfer, which had to be carried out in accordance with the company's shareholders' agreement and articles, and then helped the company bring its statutory records, board resolutions and Companies House filings up to date. The buyout completed in late 2025.

The client and the objective

The remaining founder wanted sole ownership and control of the company, a clean exit for his co-founder at an agreed price in the low six figures, and no loose ends in the company's paperwork that could cause trouble with a future investor or buyer.

The deal

Transfer of all of the departing founder's shares to the remaining founder for a low six-figure sum.
Compliance with the transfer provisions in the shareholders' agreement and the articles, including the pre-emption process and the required consents.
Resignation of the departing founder as a director, release of his obligations under the shareholders' agreement, and restrictive covenants.
Afterwards, a corporate housekeeping exercise: board resolutions, register updates, confirmation statement and the filings the company had fallen behind on.

Key legal issues and how we solved them

Following the shareholders' agreement

The company had a shareholders' agreement and bespoke articles with transfer restrictions, pre-emption rights and consent requirements. A transfer that ignores those provisions can be void or challenged later, so we ran the process they prescribed: transfer notice, offer round, waivers and board approval, documented so that the file shows the transfer was properly made.

Ending the departing founder's involvement cleanly

Beyond the shares, the departing founder was a director and a party to the shareholders' agreement. The documents released him from the agreement, recorded his resignation, dealt with any loans between him and the company, and imposed covenants protecting the company's clients, staff and code.

A team outside the UK

With developers engaged in Ukraine, we checked that the company's intellectual property position was documented, so that the code written by the team was owned by the company and would not be an issue on a later investment or sale.

Housekeeping after the buyout

Once the founder was the sole owner, the company's records needed to catch up: the register of members and PSC register, board minutes for decisions taken, the confirmation statement, and the filings that had been missed. Doing this immediately after the buyout meant a future investor would find a clean company.

Outcome

The buyout completed in late 2025 and the housekeeping followed. The remaining founder is the sole shareholder and director, and the company's records are in order for the next stage of its growth.

What this deal shows

If a shareholders' agreement exists, the buyout has to follow it; a shortcut can invalidate the transfer.
A departing founder leaves three ways: as a shareholder, as a director and as a party to the agreements. All three need documenting.
The moment after a buyout is the right time to clean up the company's records.

“A buyout that ignores the shareholders' agreement is a problem waiting for the next investor to find. We did it by the book and then tidied the rest of the file while we were there.”
Malcolm Zoppi

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Frequently asked questions

: Yes. Transfer restrictions, pre-emption rights and consent requirements in a shareholders' agreement or the articles apply to transfers between the existing shareholders as much as to outsiders. They can usually be waived by the people they protect, but the waiver should be documented.
: Bringing a company's statutory records and filings up to date: the registers of members, directors and persons with significant control, board minutes and resolutions, share certificates, confirmation statements and any overdue Companies House filings. Investors and buyers check these first, so gaps cost time and credibility later.
: Only if the contracts say so. Copyright belongs to the author unless assigned in writing, and the rules on employee-created work differ between countries. A company with developers abroad should have written contracts with clear intellectual property assignments from each developer or contractor.

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