---
title: "Shareholders’ agreement key terms checklist and term sheet (proprietary company)"
url: "https://ailawframework.com/precedents/commercial-and-corporate-advisory/shareholders-agreement-key-terms-checklist"
type: "precedent"
site: "AI Law Framework"
id: "a1-shareholders-agreement-key-terms-checklist"
area_id: "A1"
kind: "checklist"
ai_level: "yellow"
version: 1
task_ids: ["A1-T1-R10", "A1-B8-1"]
law_stated_as_at: "2026-10-18"
---

# Shareholders’ agreement key terms checklist and term sheet (proprietary company)

> Checklist and term sheet for a shareholders’ agreement in an Australian proprietary company: parties and shareholdings, board and reserved matters, funding, transfers and pre-emption, drag and tag, deadlock, leavers,…

Canonical page: https://ailawframework.com/precedents/commercial-and-corporate-advisory/shareholders-agreement-key-terms-checklist  
Law stated as at: 2026-10-18

Site index for agents: https://ailawframework.com/llms.txt

Checklist and term sheet for a shareholders’ agreement in an Australian proprietary company: parties and shareholdings, board and reserved matters, funding, transfers and pre-emption, drag and tag, deadlock, leavers, restraints, disputes, and how it fits with the constitution.

## Key facts

- Kind: Checklist. Steps or checks to work through and tick off.
- Practice area: [Commercial & Corporate Advisory](https://ailawframework.com/precedents/commercial-and-corporate-advisory.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-18
- Status: Maintained. Checked on 2026-10-18 against the 3 authorities it cites, for Australia.

## When to use it

Use at the first meeting with founders, investors or joint venturers who are setting up or restructuring a proprietary company, before a shareholders’ agreement is drafted. The completed term sheet is the drafting instruction. It is also a review list for a counterparty’s draft.

## Used for these tasks

- [Draft a shareholders' agreement or joint-venture term sheet](https://ailawframework.com/practice/commercial-and-corporate-advisory.md#A1-T1-R10)
- [Draft a first-pass shareholders agreement from a term sheet](https://ailawframework.com/practice/commercial-and-corporate-advisory.md#A1-B8-1)

## How AI may be used

AI may record the clients’ answers in the term sheet and compare it with the constitution and any existing agreement; the lawyer advises on each commercial choice and settles the drafting instructions.

**AI may:**

- Record the clients’ instructions in the term sheet from meeting notes and emails
- Compare the term sheet with the company’s constitution and list conflicts the agreement or a new constitution must resolve
- Produce a first-pass agreement from the settled term sheet using the firm’s precedent, for the lawyer to review clause by clause

**AI must not:**

- Must not recommend commercial positions such as valuation methods, leaver prices or restraint periods
- Must not act for, or appear to advise, more than one shareholder where interests conflict
- Must not process the parties’ financial or personal information in a tool outside the firm’s approved environment

**The lawyer checks:**

- The firm’s client is identified and the other parties have been told to get their own advice, with any joint retainer properly documented
- The agreement and the constitution say the same thing on transfers, pre-emption, director appointments and reserved matters, or the constitution is to be amended
- Restraints are tailored to the business and cascaded so that a court can read them down
- Deadlock, leaver and exit provisions work together and produce a price and a process in every case

## Authorities

- [Corporations Act 2001 (Cth) s 140 (constitution and replaceable rules as a contract between the company, members and officers; limits on binding members to later restrictions)](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s140.html)
- [Corporations Act 2001 (Cth) ss 1072F, 1072G (replaceable rules on registration of transfers and directors’ discretion in proprietary companies)](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s1072g.html)
- [Corporations Act 2001 (Cth) s 1071B (proper instrument of transfer)](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s1071b.html)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/commercial-and-corporate-advisory/shareholders-agreement-key-terms-checklist and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*