Share Subscription And Shareholders Agreement Template for India

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Key Requirements PROMPT example:

Share Subscription And Shareholders Agreement

"I need a Share Subscription and Shareholders Agreement for a Series A investment of INR 50 crores into my technology startup by a venture capital fund, with standard minority protections and a 15% ESOP pool to be created before March 2025."

Document background
The Share Subscription And Shareholders Agreement (SSHA) is a fundamental document used in corporate investment transactions in India, typically when a company is raising capital through the issue of new shares. This agreement serves dual purposes: it documents the terms of the investment and establishes the framework for the ongoing relationship between shareholders. The document is structured to comply with Indian corporate law, particularly the Companies Act, 2013, and includes provisions for share subscription, governance rights, transfer restrictions, exit rights, and minority protection. It's commonly used in venture capital and private equity investments, strategic investments, and other private placement situations where investors require specific rights and protections beyond those provided by standard corporate constitutional documents.
Suggested Sections

1. Parties: Identification of all parties including the company, existing shareholders, and new investors

2. Background: Context of the transaction, company's business, and purpose of the agreement

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

4. Subscription Terms: Details of shares being subscribed, price, payment terms, and conditions precedent

5. Completion: Process and obligations for closing the investment

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

7. Board Composition: Structure of the board, appointment rights, and removal of directors

8. Reserved Matters: List of actions requiring special approval from investors/board

9. Transfer Restrictions: Restrictions on transfer of shares and exceptions

10. Exit Rights: Provisions for IPO, strategic sale, drag-along and tag-along rights

11. Information Rights: Investors' rights to receive financial and operational information

12. Covenants: Ongoing obligations of the company and existing shareholders

13. Term and Termination: Duration of the agreement and circumstances for termination

14. Confidentiality: Protection of confidential information

15. Dispute Resolution: Process for resolving disputes between parties

16. General Provisions: Miscellaneous legal provisions including notices, amendments, governing law

Optional Sections

1. Anti-Dilution Rights: Protection for investors against future down rounds, used when dealing with sophisticated investors

2. ESOP Provisions: Details of employee stock option pool, included when company has/plans to have ESOP

3. Founder Vesting: Vesting schedule for founders' shares, typically included in early-stage investments

4. Non-Compete and Non-Solicit: Restrictions on competitive activities, included when required by investors

5. Foreign Investment Compliance: Specific provisions for compliance with FEMA and FDI regulations when foreign investors are involved

6. Put Option: Right for investors to sell shares back to promoters, included in specific investment structures

7. Liquidation Preference: Priority rights in case of liquidation, typically included for preferred shares

8. Strategic Rights: Special rights for strategic investors, included when strategic investors are involved

Suggested Schedules

1. Schedule 1 - Details of the Company: Company information including capital structure, subsidiaries, and material contracts

2. Schedule 2 - Subscription Details: Detailed breakdown of share subscription including valuation and cap table

3. Schedule 3 - Conditions Precedent: List of 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 special approval

6. Schedule 6 - Completion Schedule: Step-by-step completion obligations and documentation requirements

7. Schedule 7 - Key Employees: List of key employees and their terms of employment

8. Schedule 8 - Deed of Adherence: Format for new shareholders to join the agreement

9. Appendix A - Board Resolution Format: Format of board resolutions required for completion

10. Appendix B - Shareholders Resolution Format: Format of shareholders resolutions required for completion

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

Manufacturing

Healthcare

Financial Services

Real Estate

Consumer Goods

Retail

Education

Media and Entertainment

Telecommunications

Biotechnology

Clean Energy

Agriculture

Infrastructure

Relevant Teams

Legal

Finance

Corporate Development

Compliance

Board of Directors

Executive Leadership

Investment

Corporate Secretarial

Risk Management

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Lawyer

Investment Manager

Venture Capital Associate

Private Equity Manager

Company Secretary

Chief Legal Officer

Investment Banker

Corporate Finance Manager

Compliance Officer

Director of Business Development

Managing Director

Board Member

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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