Share Holding Agreement Template for India

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Key Requirements PROMPT example:

Share Holding Agreement

"I need a Share Holding Agreement for my tech startup that will receive Series A funding in March 2025, including provisions for investor board seats and anti-dilution protection for founders who will retain 60% ownership."

Document background
A Share Holding Agreement is a fundamental document in Indian corporate law that establishes the framework for shareholder relationships and corporate governance. This agreement becomes essential when a company has multiple shareholders, is seeking investment, or needs to formalize the rights and obligations of various stakeholders. It must comply with Indian legislation, particularly the Companies Act 2013, SEBI regulations, and relevant corporate laws. The agreement typically includes provisions for share transfers, voting rights, board representation, dispute resolution, and exit mechanisms. It's particularly crucial for startups, family-owned businesses transitioning to professional management, and companies with institutional investors. The document serves as a binding contract that protects both majority and minority interests while ensuring smooth corporate operations and governance.
Suggested Sections

1. Parties: Identification of all shareholders and the company

2. Background: Context of the agreement, company information, and purpose

3. Definitions and Interpretation: Key terms used throughout the agreement

4. Share Capital and Shareholding Pattern: Details of share classes, shareholding percentages, and capital structure

5. Transfer of Shares: Procedures and restrictions for share transfers

6. Right of First Refusal: Process for existing shareholders to purchase shares before third-party sales

7. Board Composition and Management: Structure of board, appointment rights, and management provisions

8. Shareholders' Meetings and Voting Rights: Procedures for meetings and voting mechanisms

9. Reserved Matters: Decisions requiring special majority or unanimous consent

10. Deadlock Resolution: Mechanisms to resolve shareholders' disputes

11. Confidentiality: Protection of company and shareholder confidential information

12. Term and Termination: Duration of agreement and termination circumstances

13. Governing Law and Jurisdiction: Applicable law and dispute resolution framework

Optional Sections

1. Tag Along Rights: Used when minority shareholders need protection to sell their shares alongside majority shareholders

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

3. Anti-dilution Protection: Important when there's likelihood of future funding rounds

4. Put and Call Options: Include when shareholders want rights to force sale or purchase of shares

5. Dividend Policy: Include when specific dividend distribution rules are needed

6. Non-compete and Non-solicitation: Important when shareholders are also involved in business operations

7. Information Rights: Detailed when minority shareholders need specific information access rights

8. Exit Rights: Include mechanisms for IPO, strategic sale, or other exit options

9. Sweat Equity Provisions: When shares are issued for non-cash consideration or services

Suggested Schedules

1. Schedule 1 - Details of Shareholders: Complete information about current shareholders including contact details and shareholding

2. Schedule 2 - Share Capital Structure: Detailed breakdown of share classes, numbers, and ownership percentages

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

4. Schedule 4 - Company Business Plan: Initial business plan and key milestones

5. Schedule 5 - Share Valuation Methodology: Agreed methods for share valuation in various circumstances

6. Schedule 6 - Board Procedures: Detailed procedures for board meetings and decision-making

7. Schedule 7 - Deed of Adherence: Template for new shareholders to join the agreement

8. Appendix A - Articles of Association: Company's Articles of Association reflecting shareholder agreement provisions

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

Manufacturing

Financial Services

Healthcare

Real Estate

E-commerce

Retail

Professional Services

Infrastructure

Education

Telecommunications

Media and Entertainment

Energy

Biotechnology

Consulting

Relevant Teams

Legal

Corporate Affairs

Finance

Compliance

Corporate Governance

Board Secretariat

Investment Relations

Risk Management

Strategy

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Manager

Board Director

Managing Director

Compliance Officer

Business Development Manager

Private Equity Manager

Venture Capital Associate

Corporate Finance Manager

Risk Manager

Strategy Director

Shareholder Relations Manager

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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