Reserved matters clause: sample for shareholder and joint venture agreements

Sample clause

Written for shareholders agreement of Grove Diagnostics Pty Ltd, a fictional imaging clinic owned by two doctors and an investor.

Decisions Reserved to Shareholders. The Company must not do any of the following without the prior written approval of Shareholders holding at least 75 per cent of the Shares, which must include the Investor while it holds 15 per cent or more: (a) issue Shares or options, other than under the employee option plan approved on the Commencement Date; (b) borrow, or give security, above $250,000 in total at any time; (c) buy or sell any asset or business worth more than $150,000, outside the approved budget; (d) approve or materially depart from the annual budget; (e) change the Constitution, the nature of the business or the auditors; (f) enter into any transaction with a Shareholder or its associate; (g) begin any winding up, or sell all or substantially all of the business.

Sample wording, not legal advice.

Variants

What to negotiate

• Thresholds keep it workable

  A reserved matters list without dollar thresholds catches everyday decisions and slows the business. Setting levels, such as borrowing over $250,000 or contracts over $500,000, and excluding items in an approved budget, leaves management to run the business while the shareholders control the big calls.

• Who holds the veto

  A 75 per cent threshold gives any holder of more than 25 per cent a veto. Naming an investor as a required approver, as the sample does, gives that investor a veto at a lower holding. Founders should check how the threshold interacts with future share issues and dilution.

• Deadlock needs a path

  A veto on the budget or on further funding can leave the business stuck if the parties disagree. The reserved matters clause should be read with a deadlock clause that escalates the dispute, sends it to mediation and, if needed, triggers a buy out, so a veto does not become a standstill.

The risk of leaving it out

Without a reserved matters clause, a company's major decisions are made by the board, and the shareholders' powers are those in the constitution and the Corporations Act. A minority investor without a board seat could see new shares issued, large debts taken on or the business sold without its agreement, with only the limited protection of oppression remedies.

How reserved matters fit company law

Under the Corporations Act 2001 the business of a company is managed by or under the direction of its directors, subject to the Act and the constitution, and certain decisions, such as changing the constitution, already need a special resolution of 75 per cent of votes cast. A shareholders agreement adds a contractual layer: the shareholders promise to vote, and to procure the company to act, only with the agreed approvals. Many agreements also make the company a party so it is bound directly. Law checked on 21 October 2026. This page explains how the law works and is not legal advice.

What usually goes on the list

Common reserved matters are issuing shares, changing the constitution, borrowing or giving security above a threshold, large acquisitions and disposals, the annual budget and business plan, related party transactions, appointing or removing the chief executive, dividends, starting litigation above a threshold, and winding up or selling the business. The Grove Diagnostics example sets out decisions reserved to shareholders after its board clause.

Joint ventures

In a two party joint venture, reserved matters often need both participants, whatever their percentages, because each has committed people and money to one project. The joint venture example gives its management committee a simple majority for ordinary decisions, with no casting vote, and lists the matters needing both participants' written agreement, so a 55 per cent participant cannot run the venture alone on the big questions.

Where the clause sits in a generated document

Shareholders agreements, joint venture agreements and partnership agreements carry this clause after the board or committee clause. When asking the AI document generator for one, list the matters, the approval threshold, any investor consent, the dollar levels and the link to the deadlock clause.

Documents that carry this clause

Shareholders agreement template for a company after a seed roundA shareholders agreement template sets out who owns what, who sits on the board, which decisions need shareholder consent, how shares are sold, and how a deadlock ends. This one is filled in for a Queensland veterinary diagnostics company that has just taken $1.5 million from one seed fund, leaving the two founders with 80 per cent between them. Its central number is an 85 per cent consent threshold for eight reserved matters, and the page below shows what that number does and does not protect.Joint venture agreement template with contributions and splitAn unincorporated joint venture has no company to fall back on, so everything a company structure would supply has to be written down. This one puts two builders together for a single $14.6 million refurbishment, splits it 55/45, and sets out who funds it, who decides, how a deadlock breaks and how either of them gets out.Partnership agreement templateThree physiotherapists have run one Newcastle practice together since 2024 without anything in writing. This agreement records what the handshake never covered: uneven capital sitting beside uneven hours, the six decisions no partner can make alone, and what a leaving partner is owed.

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