Equity Share Agreement Startup Template for India

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Key Requirements PROMPT example:

Equity Share Agreement Startup

"I need an Equity Share Agreement Startup for my Indian technology company's Series A funding round, where a single venture capital investor will invest ₹5 crore for 20% equity stake, with completion planned for March 2025."

Document background
The Equity Share Agreement Startup is a fundamental document used in the Indian startup ecosystem when companies seek to raise capital through the issuance of equity shares to investors. This agreement is crucial for startups at various funding stages, from seed to growth rounds, and must comply with Indian regulatory requirements, including the Companies Act 2013, SEBI guidelines, and applicable foreign investment regulations. The document establishes the framework for investment, defining share class rights, voting powers, board composition, and investor protections. It's particularly important as it sets the foundation for the company-investor relationship, ensuring clear understanding of rights, obligations, and governance mechanisms while providing necessary safeguards for all parties involved.
Suggested Sections

1. Parties: Details of the Company, Investor(s), and Existing Shareholders including full legal names, addresses, and registration details

2. Background: Context of the investment, brief company history, and purpose of the agreement

3. Definitions: Comprehensive list of defined terms used throughout the agreement

4. Share Subscription Details: Number, class, and price of shares being issued, along with the total investment amount

5. Payment Terms: Terms and schedule of payment for the shares, including payment method and bank details

6. Conditions Precedent: Conditions that must be satisfied before share issuance and completion

7. Completion Obligations: Steps to be taken at closing, including documentation and filing requirements

8. Representations and Warranties: Statements of fact and assurances from the company and existing shareholders

9. Investor Representations: Declarations and warranties provided by the investor

10. Board Composition: Structure and composition of the board, including investor director rights

11. Reserved Matters: List of actions requiring specific investor approval

12. Transfer Restrictions: Limitations on transfer of shares and related procedures

13. Exit Rights: Provisions for investor exit including drag-along and tag-along rights

14. Confidentiality: Obligations regarding confidential information

15. Notices: Process and requirements for formal communications between parties

16. Governing Law and Jurisdiction: Applicable law and dispute resolution mechanisms

Optional Sections

1. Anti-Dilution Rights: Protection against future down rounds, used when requested by sophisticated investors

2. Liquidation Preference: Priority rights in case of liquidation, typically included for significant investments

3. ROFR and ROFO: Right of First Refusal and Right of First Offer provisions, used for controlled exit scenarios

4. Information Rights: Specific reporting and information access rights, important for minority investors

5. Non-Compete and Non-Solicit: Restrictions on founders and key employees, used when required by investors

6. Foreign Investment Compliance: Additional provisions for foreign investors to ensure FEMA compliance

7. Strategic Rights: Special rights for strategic investors like first right to supply or technology access

8. Founder Vesting: Vesting provisions for founder shares, typically used in early-stage startups

Suggested Schedules

1. Schedule 1 - Company Information: Detailed corporate information including cap table, subsidiaries, and material contracts

2. Schedule 2 - Subscription Details: Detailed breakdown of share subscription including share certificate numbers and consideration

3. Schedule 3 - Conditions Precedent: Comprehensive list of all conditions to be satisfied before completion

4. Schedule 4 - Warranties: Detailed warranties given by the company and existing shareholders

5. Schedule 5 - Reserved Matters: Comprehensive list of matters requiring investor consent

6. Schedule 6 - Completion Requirements: Detailed list of documents and actions required at completion

7. Appendix A - Board Resolution: Format of board resolution approving the share issuance

8. Appendix B - Disclosure Letter: Exceptions and qualifications to the warranties

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

E-commerce

Financial Technology

Healthcare Technology

Software Development

Biotechnology

Clean Technology

Artificial Intelligence

Digital Media

Education Technology

Manufacturing

Retail Technology

Logistics Technology

Agricultural Technology

Relevant Teams

Legal

Finance

Corporate Development

Compliance

Executive Leadership

Investment

Corporate Secretarial

Board of Directors

Due Diligence

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Manager

Venture Capital Associate

Private Equity Manager

Startup Founder

Managing Director

Board Member

Compliance Officer

Investment Banker

Due Diligence Officer

Finance Director

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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