Independent Contractor Equity Agreement Template for England and Wales

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Key Requirements PROMPT example:

Independent Contractor Equity Agreement

"I need an Independent Contractor Equity Agreement for a senior software developer who will work 3 days per week from March 2025, with a 4-year vesting schedule and 1-year cliff for 2% equity in our fintech startup."

Document background
The Independent Contractor Equity Agreement is essential for companies in England and Wales seeking to engage contractors while offering equity as part of their compensation. This arrangement is particularly common in startup environments where cash conservation is crucial, but the company wants to attract top talent. The document combines standard contractor terms with sophisticated equity provisions, ensuring compliance with both company and employment law while protecting both parties' interests. It's designed to clearly establish the contractor relationship while providing detailed terms of equity participation, including vesting schedules, share rights, and transfer restrictions.
Suggested Sections

1. Parties: Identifies the contracting parties and their details

2. Background: Sets out the context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Services: Describes the contractor's duties and responsibilities

5. Equity Grant: Details of the equity being granted, including amount, type, and vesting schedule

6. Independent Contractor Status: Confirms independent contractor relationship and disclaims employment status

7. Term and Termination: Duration of agreement and termination provisions

8. Confidentiality: Provisions protecting confidential information

9. Governing Law: Specifies applicable law and jurisdiction

Optional Sections

1. Non-Compete: Restrictions on competitive activities - include when protecting business interests is crucial

2. Intellectual Property: IP ownership and transfer provisions - include when contractor will create IP during engagement

3. Tax Indemnity: Contractor's tax obligations and indemnities - include when tax implications are significant

4. Change of Control: Provisions for company sale or merger - include when exit possibilities are contemplated

Suggested Schedules

1. Schedule 1: Services Description: Detailed scope of contractor services

2. Schedule 2: Equity Terms: Detailed terms of equity grant including vesting schedule

3. Schedule 3: Share Rights: Details of share class rights and restrictions

4. Appendix A: Form of Share Certificate: Template share certificate

5. Appendix B: Articles of Association: Current articles of association

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 Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Key legislation governing share capital regulations, share classes and rights, directors' duties, corporate governance requirements, and share issuance procedures

Employment Rights Act 1996: Legislation to ensure clear distinction between employee and contractor status and avoid misclassification risks

Income Tax Act 2007: Tax legislation covering equity awards, IR35 considerations, and Capital Gains Tax implications

National Insurance Contributions Act 1992: Legislation governing social security implications and contractor vs. employee status classifications for insurance purposes

Financial Services and Markets Act 2000: Regulations concerning securities and financial promotion restrictions

Contract Law Principles: Common law principles covering contract formation, consideration requirements, and terms and conditions

Shareholders' Rights: Legal framework covering Articles of Association, existing shareholders' pre-emption rights, and voting rights

Data Protection Act 2018: UK GDPR implementation covering personal data handling and privacy considerations

Competition Law: Legal framework governing non-compete provisions and restrictive covenants

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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