Document background
The Advisory Shares Agreement is a critical document used when companies, particularly startups and growing businesses in India, seek to engage experienced advisors while preserving cash resources. This agreement type has become increasingly common in the Indian startup ecosystem as companies look to leverage expert guidance in exchange for equity compensation. The document, structured under Indian corporate law framework, typically details the quantum of shares offered (usually 0.1% to 2% of company equity), vesting schedules, and specific advisory responsibilities. It includes provisions compliant with the Companies Act 2013 and SEBI regulations, addressing key aspects such as share transfer restrictions, confidentiality obligations, and termination conditions. The Advisory Shares Agreement is particularly valuable for early-stage companies looking to attract high-quality advisors while managing cash flow, and for advisors seeking to build a portfolio of equity positions in promising ventures.
