Equity For Services Agreement Template for England and Wales

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Key Requirements PROMPT example:

Equity For Services Agreement

"I need an Equity For Services Agreement for my tech startup to engage a senior software developer who will receive 3% equity vesting over 3 years, starting March 2025, in exchange for building our core platform."

Document background
The Equity For Services Agreement is commonly used by companies, particularly startups and growing businesses in England and Wales, seeking to obtain professional services while preserving cash resources. This document structures the exchange of equity for services, defining the scope of work, share allocation, vesting schedules, and related terms. It's particularly relevant in scenarios where companies want to align service providers' interests with long-term business success. The agreement must comply with UK company law, including Companies Act 2006 requirements for share issuance and corporate governance.
Suggested Sections

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Services: Detailed description of services to be provided

5. Equity Compensation: Details of share allocation, vesting terms, and conditions

6. Term and Termination: Duration and termination provisions

7. Confidentiality: Protection of sensitive information

Optional Sections

1. Non-Competition: Restrictions on competitive activities - include when protecting company interests from direct competition

2. Intellectual Property: IP ownership and transfer provisions - include when services involve creation of IP

3. Tax Indemnity: Tax-related protections and obligations - include when tax implications need specific addressing

Suggested Schedules

1. Service Specification: Detailed breakdown of services to be provided

2. Vesting Schedule: Timeline and conditions for equity vesting

3. Share Rights: Specific rights attached to the shares being issued

4. Companies House Forms: Required statutory forms for share issuance

5. Existing Shareholders' Agreement: Reference to or extract of relevant provisions

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
Industries

Companies Act 2006: Primary legislation governing company operations including share capital, allotment provisions, directors' duties, share transfer restrictions, statutory pre-emption rights, and Companies House filing requirements

Employment Rights Act 1996: Legislation covering employment rights and obligations, relevant for service provisions even in non-traditional employment relationships

Financial Services and Markets Act 2000: Regulates financial promotions and offerings, including relevant exemptions for private companies in equity arrangements

Income Tax Act 2007: Tax legislation governing income tax implications of equity-for-services arrangements

Corporation Tax Act 2009: Tax legislation covering corporate tax implications of equity issuance and service compensation

Equality Act 2010: Legislation ensuring non-discrimination and fair treatment in business arrangements

Data Protection Act 2018 & UK GDPR: Legislation governing personal data handling and privacy requirements in business relationships

National Minimum Wage Act 1998: Legislation ensuring service compensation meets minimum statutory requirements

Articles of Association: Company's constitutional document that must be complied with for any equity arrangements

Common Law Principles: Fundamental contract law principles, fiduciary duties, and consideration requirements under English law

FCA Regulations: Financial Conduct Authority rules governing regulated activities and investor protection in equity arrangements

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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