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Restricted Share Purchase Agreement

Restricted Share Purchase Agreement Template for India

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Key Requirements PROMPT example:

Restricted Share Purchase Agreement

"I need a Restricted Share Purchase Agreement for transferring 10,000 shares to our senior software engineer, with a 4-year vesting schedule starting March 2025 and standard bad leaver provisions."

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Document background
The Restricted Share Purchase Agreement is a specialized legal document used in Indian corporate transactions where shares are transferred subject to specific restrictions and conditions. This agreement is commonly utilized in scenarios such as employee stock ownership plans, startup equity distributions, or closely-held company transactions where controlling share transfers is crucial. The document must comply with Indian corporate law, particularly the Companies Act, 2013, SEBI regulations, and relevant tax provisions. It typically includes detailed provisions on vesting schedules, transfer restrictions, valuation mechanisms, and shareholder rights. The agreement is particularly important in protecting company interests while facilitating strategic share transfers, whether for employee retention, investment purposes, or corporate restructuring.
Suggested Sections

1. Parties: Identification of the seller, purchaser, and the company whose shares are being transferred

2. Background: Context of the transaction, including company details and purpose of the restricted share transfer

3. Definitions: Key terms used throughout the agreement, including specific definitions related to restricted shares and vesting conditions

4. Share Purchase: Details of shares being purchased, including number, class, and purchase price

5. Transfer Restrictions: Specific restrictions on the transfer of shares, including lock-in period and conditions for transfer

6. Vesting Schedule: Detailed timeline and conditions for the vesting of shares

7. Payment Terms: Structure and timing of payment for the shares

8. Representations and Warranties: Statements of fact by both parties regarding their capacity, authority, and share ownership

9. Company Covenants: Obligations of the company regarding share registration and compliance

10. Termination Rights: Circumstances under which the agreement can be terminated and consequences

11. Governing Law and Jurisdiction: Applicable law and courts having jurisdiction over disputes

12. Notices: Process and addresses for formal communications between parties

13. General Provisions: Standard boilerplate clauses including amendments, waivers, and severability

Optional Sections

1. Tag-Along Rights: Include when minority shareholders need protection to join in sale of shares by majority shareholders

2. Drag-Along Rights: Include when majority shareholders need right to force minority shareholders to join in sale

3. Employee-Specific Provisions: Include when shares are part of employee compensation or ESOP

4. Right of First Refusal: Include when existing shareholders should have priority right to purchase shares before third parties

5. Bad Leaver Provisions: Include when shares are tied to employment and consequences of termination need to be addressed

6. Share Forfeiture Conditions: Include when there are specific conditions under which shares must be returned or forfeited

7. Foreign Investment Compliance: Include when purchaser is a foreign entity or individual

Suggested Schedules

1. Share Details: Detailed description of shares including certificate numbers, distinctive numbers, and share history

2. Vesting Schedule Details: Detailed breakdown of vesting timeline, milestones, and conditions

3. Company Information: Key corporate information including registration details, directors, and share capital structure

4. Transfer Restrictions: Detailed explanation of all transfer restrictions and procedures

5. Required Regulatory Approvals: List of necessary regulatory approvals and compliance requirements

6. Form of Share Transfer Deed: Template for executing the physical transfer of shares

7. Shareholders' Agreement: Copy or relevant excerpts of existing shareholders' agreement affecting the shares

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Applicable Law
Board
Business Day
Closing
Closing Date
Company
Completion
Confidential Information
Consideration
Deed of Adherence
Encumbrance
Fair Market Value
Financial Year
Fully Diluted Basis
Governmental Authority
Lock-in Period
Material Adverse Effect
Parties
Purchase Price
Purchaser
Restricted Shares
Restrictions
SEBI
Seller
Share Certificate
Shareholders' Agreement
Shares
Stamp Duty
Tax
Transfer
Transfer Deed
Transfer Restrictions
Vesting Date
Vesting Period
Vesting Schedule
Voting Rights
Working Hours
Restricted Period
Related Party
Permitted Transferee
Forfeiture Event
Good Leaver
Bad Leaver
Cause
Change of Control
Tag-Along Rights
Drag-Along Rights
Clauses
Interpretation
Share Purchase
Purchase Price
Payment Terms
Transfer Restrictions
Vesting Conditions
Share Certificates
Representations and Warranties
Covenants
Rights and Obligations
Lock-in Period
Tag-Along Rights
Drag-Along Rights
Forfeiture
Confidentiality
Non-Competition
Non-Solicitation
Board Matters
Voting Rights
Dividends
Exit Rights
Events of Default
Termination
Dispute Resolution
Governing Law
Notices
Assignment
Amendments
Severability
Entire Agreement
Force Majeure
Indemnification
Stamp Duty
Regulatory Compliance
Share Valuation
Relevant Industries

Technology and Software

Professional Services

Financial Services

Manufacturing

Healthcare

E-commerce

Education

Real Estate

Telecommunications

Consulting

Start-ups and Emerging Companies

Relevant Teams

Legal

Finance

Human Resources

Compliance

Corporate Secretarial

Investment

Executive Leadership

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Manager

Human Resources Director

Compliance Officer

Board Director

Equity Partner

Investment Banker

Private Equity Manager

Venture Capitalist

Corporate Finance Manager

Stock Plan Administrator

Industries
Companies Act, 2013: Primary legislation governing company operations in India, including share capital, share transfers, and shareholder rights
Securities and Exchange Board of India Act, 1992: Regulates securities market and protects investor interests, including provisions for restricted securities and their transfer
Indian Contract Act, 1872: Fundamental law governing contracts in India, including formation, validity, and enforcement of agreements
Income Tax Act, 1961: Governs taxation aspects of share transfers, including capital gains and tax implications of restricted shares
Indian Stamp Act, 1899: Determines stamp duty requirements for share transfer documents and agreements
Foreign Exchange Management Act (FEMA), 1999: Regulates foreign investment in Indian shares and cross-border transactions if applicable
Securities Contracts (Regulation) Act, 1956: Regulates trading of securities and establishes framework for share transfer restrictions
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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Restricted Share Purchase Agreement

An Indian law-governed agreement for the purchase and transfer of restricted shares, including transfer limitations and vesting conditions.

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