Share Redemption Agreement Template for India

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Key Requirements PROMPT example:

Share Redemption Agreement

"I need a Share Redemption Agreement for an unlisted private limited company in India to redeem 10,000 preference shares from a single institutional investor by March 2025, with payment to be made in two installments."

Document background
The Share Redemption Agreement is a crucial document used when a company wishes to buy back its own shares from existing shareholders in India. This agreement is particularly relevant in scenarios such as capital structure optimization, exit provision implementation, or surplus cash utilization. The document must comply with the Companies Act, 2013, which sets out specific conditions for share redemption, including source of funds restrictions and procedural requirements. It's essential for both listed and unlisted companies, though listed companies must additionally comply with SEBI regulations. The agreement typically includes detailed provisions about valuation methodology, payment mechanisms, tax implications, and regulatory compliance requirements. It's particularly important in private equity exits, family business restructuring, and corporate reorganizations where share redemption is used as a mechanism for shareholder exits or capital structure adjustments.
Suggested Sections

1. Parties: Identification of the company and the shareholders whose shares are being redeemed

2. Background: Recitals explaining the context of the redemption, including company's authority to redeem shares

3. Definitions: Definitions of key terms used throughout the agreement

4. Agreement to Redeem: Core agreement clause specifying the shares to be redeemed and basic terms

5. Redemption Price: Details of the redemption price per share and total consideration

6. Payment Terms: Terms and method of payment for the redeemed shares

7. Conditions Precedent: Conditions that must be satisfied before the redemption can occur

8. Closing: Details of the closing process, timing, and deliverables

9. Representations and Warranties: Standard representations by both parties regarding authority, ownership, and compliance

10. Tax Matters: Provisions regarding tax implications and responsibilities

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process and details for serving notices under the agreement

13. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction details

14. General Provisions: Standard boilerplate provisions including amendments, waivers, and severability

Optional Sections

1. Regulatory Compliance: Required for listed companies to address SEBI regulations and additional compliance requirements

2. Tag-Along Rights: Include when partial redemption might trigger rights of other shareholders

3. Escrow Arrangements: Include when payment is to be made through an escrow mechanism

4. Non-Competition and Non-Solicitation: Include when redeeming shares from key shareholders who had operational roles

5. Corporate Approvals: Detailed section needed for listed companies or when special resolutions are required

6. Foreign Exchange Compliance: Required when shareholders are non-resident Indians or foreign nationals

Suggested Schedules

1. Details of Shares: Complete details of shares being redeemed including share certificate numbers, distinctive numbers, and class of shares

2. Calculation of Redemption Price: Detailed methodology and calculations used to determine the redemption price

3. Corporate Authorizations: Copies of board resolutions, shareholder resolutions, and other corporate approvals

4. Closing Checklist: List of all documents and actions required for closing

5. Form of Share Transfer Forms: Templates of required statutory forms for share transfer

6. Tax Certificates: Required tax declarations and certificates

7. Regulatory Filings: List and copies of all required regulatory filings and forms

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
Relevant Industries

Financial Services

Technology

Manufacturing

Real Estate

Healthcare

Retail

Professional Services

Energy

Infrastructure

Telecommunications

Education

Mining and Materials

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Tax

Corporate Development

Treasury

Risk Management

Corporate Affairs

Investor Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Banker

Financial Controller

Tax Manager

Compliance Officer

Board Director

Corporate Finance Manager

Chief Legal Officer

Managing Director

Finance Director

Corporate Development 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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