Subscription And Shareholders Agreement Template for England and Wales

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Key Requirements PROMPT example:

Subscription And Shareholders Agreement

"I need a Subscription And Shareholders Agreement for my tech startup to bring in two new venture capital investors who will collectively invest £5 million for a 30% stake in the company, with completion planned for March 2025."

Document background
A Subscription And Shareholders Agreement is typically used when a company is raising capital through the issue of new shares while simultaneously establishing or updating the governance framework between all shareholders. This document, governed by English and Welsh law, serves a dual purpose: it details the terms of the share subscription (including price, number of shares, and completion mechanics) and sets out the ongoing rights and obligations of shareholders (including voting rights, board appointment rights, and share transfer restrictions). It's particularly crucial for private companies, venture capital investments, and corporate restructurings where clear governance and investment terms are essential.
Suggested Sections

1. Parties: Identification and details of all contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Subscription Details: Share class, number, price, and payment terms

5. Completion Mechanics: Process and requirements for completing the subscription

6. Warranties: Standard company and subscriber warranties

7. Transfer Restrictions: Limitations on share transfers

8. Shareholder Rights: Voting rights, dividend rights, and other entitlements

Optional Sections

1. Tag-Along Rights: Right of minority shareholders to join in sale of majority stake - include when protecting minority shareholders

2. Drag-Along Rights: Right of majority to force minorities to join in sale - include when facilitating potential future sale

3. Anti-dilution Provisions: Protection against value dilution in future rounds - include for institutional investors

4. Board Appointment Rights: Rights to appoint directors - include for significant shareholders

Suggested Schedules

1. Schedule 1 - Share Capital Table: Current and post-completion shareholding structure

2. Schedule 2 - Warranties: Detailed company and subscriber warranties

3. Schedule 3 - Reserved Matters: List of decisions requiring special approval

4. Schedule 4 - Deed of Adherence: Template for future shareholders to join agreement

5. Schedule 5 - Articles of Association: New/amended articles to be adopted

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
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company operations, including share capital, allotment provisions, directors' duties, shareholder rights, company constitution requirements, and pre-emption rights

Financial Services and Markets Act 2000: Regulates investment activities, financial promotion restrictions, and regulated activities in the financial sector

Corporate Insolvency and Governance Act 2020: Covers insolvency provisions and corporate governance requirements

Law of Property (Miscellaneous Provisions) Act 1989: Key contract law legislation affecting property and contractual arrangements

Unfair Contract Terms Act 1977: Regulates unfair terms in contracts and sets limits on exclusion clauses

Misrepresentation Act 1967: Governs false or misleading statements made during contract formation

UK Listing Rules: Regulations applicable to listed companies or those planning to list on stock exchanges

Competition Act 1998: Regulates anti-competitive behavior and market practices

Enterprise Act 2002: Supplements competition law and provides framework for merger control

UK GDPR: Post-Brexit data protection regulation governing personal data processing

Data Protection Act 2018: UK's implementation of data protection standards and requirements

Income Tax Act 2007: Governs income tax implications for shareholders and dividend payments

Corporation Tax Act 2010: Regulates corporate tax obligations and reliefs

PSC Regulations: Requirements for recording and reporting People with Significant Control

Modern Slavery Act 2015: Compliance requirements for larger companies regarding modern slavery and human trafficking

Bribery Act 2010: Anti-corruption legislation affecting corporate conduct and compliance

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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