Document background
A Startup Shareholder Agreement is a fundamental document used when establishing or formalizing the relationship between shareholders in an Indian startup company. This agreement becomes particularly crucial during early-stage funding rounds, company restructuring, or when new investors join the cap table. The document, governed by Indian law, typically includes detailed provisions on share transfer restrictions, management rights, reserved matters, exit rights, and dispute resolution mechanisms. It must comply with the Companies Act, 2013, and other relevant Indian legislation while addressing specific concerns of the startup ecosystem, such as founder vesting, employee stock options, and future funding rounds. The agreement serves as a crucial governance tool that balances the interests of founders, investors, and the company while providing a clear framework for decision-making and conflict resolution.
