Business Equity Agreement Template for Australia

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Key Requirements PROMPT example:

Business Equity Agreement

"I need a Business Equity Agreement for my technology startup to bring in two new investors who will collectively own 30% of the company, with provisions for board representation and anti-dilution protection, to be completed by March 2025."

Document background
The Business Equity Agreement is a fundamental document used in Australian business operations when establishing or modifying ownership structures between multiple parties. It is particularly crucial when bringing in new shareholders, restructuring existing ownership, or setting up investment arrangements. The agreement must comply with Australian corporate law, including the Corporations Act 2001 and relevant state legislation. It typically includes detailed provisions about share ownership, voting rights, management control, transfer restrictions, and exit mechanisms. This document is essential for protecting all parties' interests and preventing future disputes by clearly defining rights, obligations, and procedures for various scenarios that may arise in the course of business operations.
Suggested Sections

1. Parties: Identifies all parties to the agreement, including full legal names and addresses

2. Background: Sets out the context and purpose of the agreement, including current business ownership structure

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation principles

4. Equity Structure: Details the total equity, classes of shares/units, and ownership percentages

5. Consideration: Specifies the payment or value exchange for the equity transfer

6. Completion: Outlines the completion process, timing, and conditions precedent

7. Representations and Warranties: Standard warranties about capacity, ownership, and business condition

8. Management and Control: Governance structure, voting rights, and decision-making processes

9. Transfer Restrictions: Limitations on transfer of equity interests and required procedures

10. Pre-emptive Rights: First right of refusal for existing owners on equity transfers

11. Drag and Tag Rights: Provisions for forced sale or right to join in sale of equity

12. Dispute Resolution: Process for resolving disputes between parties

13. Confidentiality: Obligations regarding confidential information

14. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Buy-Sell Provisions: Detailed procedures for buying out shareholders in specific events (death, disability, retirement)

2. Vesting Schedule: For agreements involving gradual equity acquisition or employee equity schemes

3. Anti-dilution Protection: Protections against ownership dilution in future capital raises

4. Board Composition: Specific rules about board structure and appointment rights when applicable

5. Dividend Policy: Specific dividend distribution requirements if agreed

6. Non-Compete and Non-Solicit: Restrictions on competitive activities and solicitation

7. Exit Strategy: Specific provisions for company sale or IPO

8. Impact Provisions: For social enterprises or specific mission-driven requirements

Suggested Schedules

1. Schedule 1 - Share Capital Table: Detailed breakdown of share ownership and classes

2. Schedule 2 - Company Information: Key company details, registrations, and material contracts

3. Schedule 3 - Completion Requirements: Checklist of documents and actions required at completion

4. Schedule 4 - Reserved Matters: List of decisions requiring special approval

5. Schedule 5 - Warranties: Detailed warranties given by the parties

6. Appendix A - Share Certificate Forms: Template share certificates if applicable

7. Appendix B - Deed of Accession: Template for new shareholders joining the agreement

8. Appendix C - Valuation Methodology: Agreed method for valuing shares in various scenarios

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Technology

Professional Services

Manufacturing

Retail

Healthcare

Financial Services

Real Estate

Construction

Mining

Agriculture

Education

Hospitality

Media and Entertainment

Telecommunications

Energy

Transportation and Logistics

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Board of Directors

Compliance

Investment

Corporate Advisory

Risk Management

Company Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Company Secretary

Corporate Lawyer

Legal Counsel

Investment Manager

Business Development Director

Venture Capital Partner

Private Equity Manager

Corporate Advisory Director

Board Member

Company Director

Compliance Officer

Financial Controller

Business Owner

Founding Partner

Startup Founder

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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