Shareholders agreement, Kelvin Grove Diagnostics

Shareholders agreement template

A veterinary diagnostics company has just taken $1.5 million from one seed fund. The founders keep 80 percent between them, so the whole agreement turns on a single number: the 75 percent consent threshold that puts the investor on one side of every decision that matters.

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Kelvin Grove Diagnostics

Shareholders agreement · Kelvin Grove Diagnostics Pty Ltd ACN 671 402 118Page 2 of 10

Shareholders agreement · Kelvin Grove Diagnostics Pty Ltd ACN 671 402 118Page 3 of 10

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Shareholders agreement · Kelvin Grove Diagnostics Pty Ltd ACN 671 402 118Page 8 of 10

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Shareholders agreement · Kelvin Grove Diagnostics Pty Ltd ACN 671 402 118Page 10 of 10

This agreement is made on 2 November 2026 between Kelvin Grove Diagnostics Pty Ltd ACN 671 402 118 of Level 2, 340 Musk Avenue, Kelvin Grove QLD 4059, called the Company, Dr Selina Marchetti and Owen Baptiste, called the Founders, and Estuary Seed Fund Pty Ltd ACN 655 813 004 as trustee for the Estuary Seed Trust, called the Investor.

The Company develops and sells point of care diagnostic assays for veterinary practices. It carries on no other business without a decision under clause 4.

The Investor subscribed for shares on 2 November 2026. This agreement records how the three shareholders will run the Company together, and what each of them may and may not do without the others.

Shareholder	Class	Shares	Holding
Dr Selina Marchetti	Ordinary	2,200,000	44.0%
Owen Baptiste	Ordinary	1,800,000	36.0%
Estuary Seed Fund	Seed preference	1,000,000	20.0%
Total on issue		5,000,000	100.0%

On a sale or a winding up, the seed preference shares are paid the subscription amount of $1,500,000 before anything is paid to ordinary shares, and then share in the balance as if they were ordinary shares. There is no accruing dividend.

The Company may issue up to 500,000 additional ordinary shares under an employee share plan. Those issues dilute all shareholders equally and do not need a decision under clause 4.

The board has three directors: one appointed by Dr Marchetti, one appointed by Mr Baptiste, and one appointed by the Investor while it holds at least 10 percent of the shares. The chair is elected by the board each year and has no casting vote.

The board meets at least every second month. A quorum is two directors, one of whom must be the Investor director if the Investor has appointed one. Papers go out five business days before the meeting.

A director appointed by a shareholder owes their duties to the Company, not to the shareholder who appointed them. Nothing in this agreement relieves a director of a duty under the Corporations Act 2001.

The Company must not do any of the following without the written consent of shareholders holding at least 75 percent of the shares on issue, which in practice means the Investor and at least one Founder must agree.

What	When	To whom
Management accounts and cash position	Within 20 days of month end	All shareholders
Board papers	5 business days before each meeting	All directors
Annual budget for board approval	By 31 May each year	All shareholders
Audited or reviewed annual accounts	Within 120 days of 30 June	All shareholders
Cap table after any share issue	Within 10 business days	All shareholders

A shareholder holding at least 10 percent may inspect the accounting records and the share register on five business days notice, at their own cost and during business hours.

Before issuing shares to anyone else, the Company must offer them to existing shareholders in proportion to their holdings, on the same terms, with 15 business days to accept.

Shares not taken up are offered again to the shareholders who accepted in full, in proportion to their holdings, with a further 10 business days. Anything still not taken up may be issued to a third party within 90 days on terms no better than those offered.

If shares are issued at less than $1.50 each while the Investor holds seed preference shares, the Investor is issued additional ordinary shares for no further payment so that its average price per share equals the new issue price on a broad based weighted average basis.

A shareholder who wants to sell must first give a transfer notice to the Company stating the number of shares and the price. The Company offers them to the other shareholders in proportion to their holdings, who have 20 business days to accept.

If the other shareholders do not take all the shares, the seller may sell them to a named third party within 60 days at a price no lower than the transfer notice price, and only if that buyer signs a deed agreeing to this agreement.

A shareholder may transfer shares to a family trust or a wholly owned company without following clause 7.1, provided the transferee signs a deed and the shares come back if the relationship ends.

No shareholder may transfer shares to a competitor of the Company without the consent of holders of 75 percent of the shares, whatever the price offered.

If holders of at least 75 percent of the shares accept a genuine offer for all of the shares from an unrelated buyer, they may require the remaining shareholders to sell on the same terms. The dragged shareholders give the same warranties as to title only, and no more.

If a shareholder proposes to sell shares that would give the buyer more than 50 percent, every other shareholder may require the buyer to acquire the same proportion of their shares on the same terms before the sale proceeds.

Half of each Founder holding is subject to vesting from 2 November 2026: 1,100,000 of Dr Marchetti shares and 900,000 of Mr Baptiste shares. The other half is fully vested and not affected by this clause.

Twenty five percent of the vesting shares vest after twelve months of continuous engagement, and the remainder vest in 36 equal monthly instalments after that. Vesting stops on the day a Founder stops working for the Company.

Unvested shares may be bought back by the Company for their issue price. A Founder who leaves because of death, permanent incapacity or removal without cause keeps all shares as if vesting had continued for a further twelve months.

All unvested shares vest in full immediately before a sale of the Company under clause 8.1.

Each shareholder keeps the affairs of the Company confidential and uses that information only as a shareholder or director. The Investor may report to its own investors on a no names basis, and each shareholder may disclose to their professional advisers.

While a Founder holds shares and for twelve months after they cease to hold any, they will not carry on or hold more than 5 percent of a business supplying point of care veterinary diagnostics in Australia or New Zealand, and will not solicit an employee or a customer of the Company.

Each Founder assigns to the Company all intellectual property they created that relates to its business, whenever it was created, and will sign anything reasonably needed to record that assignment.

If this agreement and the constitution conflict, this agreement prevails between the shareholders, and the shareholders will vote to amend the constitution so that it agrees with this agreement.

The Company is a party to this agreement and must do what this agreement requires of it, so far as the law and the duties of its directors permit.

No share is issued or transferred until the incoming holder signs a deed of accession, and the Company must not register a transfer without one.

Notices are given by email to the addresses in Schedule 1 and are taken to be received when sent, unless the sender receives a delivery failure message.

The laws of Queensland apply and each party submits to the courts of that state.

This agreement may be varied only in writing signed by all parties. It may be signed in counterparts and by electronic signature, and a signed counterpart has the same effect as an original.

The addresses for a notice under clause 13.2, and the person each party nominates to receive the reporting in clause 5. A change of address takes effect only when notified in writing to the other parties.

Party	Notices to	Reporting contact
Dr Selina Marchetti	Registered address in the share register	Managing director
Owen Baptiste	Registered address in the share register	Technical director
Estuary Seed Fund Pty Ltd	The investment manager named at completion	Investment manager
Kelvin Grove Diagnostics Pty Ltd	The registered office of the Company	Company secretary

Executed by each party through a person authorised to bind it. Each shareholder confirms they have had the opportunity to obtain independent legal advice about this agreement and the rights it changes.

Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Contents: Thirteen clause groups with their numbers, so an investor can find the reserved matters and the transfer controls without reading forwards.
1. Parties and the company: The company, both founders and the seed fund as trustee, what the business actually is, and a line saying the agreement exists because the investor subscribed.
2. Shares held: A cap table by class and holding, a stats row for the $1.5 million subscription at $1.50 a share, the liquidation preference, and a 500,000 share employee pool.
3. The board: One director each for the two founders and one for the investor while it holds 10 percent, a quorum rule, no casting vote, and a reminder that directors duties still apply.
Agreement against constitution: An information panel on why the private document carries the commercial bargain while the lodged constitution stays public, pointing forward to the clause that resolves a conflict.
4. Decisions reserved to shareholders: Eight numbered matters the company cannot do without holders of 75 percent agreeing in writing, each with the scope written into the item rather than left broad.
5. Information rights: A five row table of what gets reported and when, from monthly management accounts within 20 days to the cap table within 10 business days of an issue, plus inspection rights at 10 percent.
6. Issuing new shares: Pre-emption in proportion to holdings with 15 business days to accept, a second round for shares not taken up, and broad based weighted average protection below $1.50.
7. Selling shares: A transfer notice to the other holders first, 60 days to sell outside at no lower price, permitted transfers to a family trust, and no sale to a competitor at any price.
8. Drag along and tag along: Holders of 75 percent can require the rest to sell into a genuine offer with title warranties only, and any sale passing 50 percent lets everyone else sell the same proportion.
9. Founder vesting: Half of each founder holding on a twelve month cliff then 36 months, buyback of unvested shares at issue price, twelve months of credit for a good leaver, and full acceleration on a sale.
10. Deadlock: A four step timeline from the deadlock notice through a shareholders meeting and mediation to a buy or sell offer that has to be answered within 30 business days.
11. Confidentiality and restraint: Confidentiality with a carve out letting the fund report to its own investors on a no names basis, a twelve month founder restraint, and an assignment of founder intellectual property.
12 and 13. Priority and general: Which document wins, the company's own obligations, deeds of accession before any transfer is registered, notices, Queensland law and electronic signing.
Schedule and execution: A notices table naming the reporting contact for each party, the panel explaining the 75 percent figure, then four signature blocks including one for the company itself.

What makes this document work

The consent threshold is explained where it is set

A panel at the back does the arithmetic out loud. The investor holds 20 percent, so 75 percent means nothing on the reserved list happens without it, and no founder can be outvoted by the other two alone. A simple majority would have handed the founders everything and a unanimous test would have given any one holder a veto over routine business.

Only half of each founder holding is exposed to vesting

1,100,000 of Dr Marchetti's shares and 900,000 of Mr Baptiste's sit on a twelve month cliff and 36 monthly instalments. The other half is already theirs. That is the shape most seed rounds actually land on, and it is far more useful to read than a clause that puts every founder share back on the table.

Deadlock finishes somewhere instead of trailing off

A matter is deadlocked once a reserved decision has failed twice in 30 days. Then a meeting inside ten business days, mediation inside twenty, and finally a buy or sell offer where the shareholder who names the price must be willing to sit on either side of it within 30 business days.

Questions people ask

What is the difference between a shareholders agreement and a constitution?

A constitution is the company's internal rulebook and it is a matter of public record with ASIC. A shareholders agreement is private, so it is where the commercial bargain sits: who gets a board seat, what needs consent, how someone gets out. Clause 12 here says the agreement prevails between the shareholders and commits them to vote the constitution into line.

Do you still need an agreement if the company has a constitution?

Usually. A constitution and the replaceable rules cover mechanics such as meetings, share issues and the appointment of directors. Neither says anything about reserved matters, drag along, anti dilution or founder vesting. Anything that is in neither document is not enforceable when the relationship goes wrong.

Can an investor's nominee director vote in the investor's interests?

No. A director appointed by a shareholder still owes their duties to the company under the Corporations Act 2001, and no shareholders agreement can relieve them of that. Clause 3.3 states it explicitly, which is worth doing because nominee directors are the most common place where the point gets forgotten.

What are reserved matters in a shareholders agreement?

The list of things the company cannot do without a stated level of shareholder consent. There are eight here, all set at 75 percent: issuing shares, selling the business, borrowing over $250,000, changing what the company does, paying a dividend, lifting founder pay by more than 15 percent, related party contracts, and any winding up or administration.

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