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Call Option Shareholders Agreement

Call Option Shareholders Agreement Template for Malaysia

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Key Requirements PROMPT example:

Call Option Shareholders Agreement

"I need a Call Option Shareholders Agreement under Malaysian law for a tech startup, where the majority shareholder grants a 25% call option to a venture capital investor, exercisable within 3 years from March 2025, with a pre-determined exercise price of RM 5 million."

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Document background
The Call Option Shareholders Agreement is a crucial document in Malaysian corporate transactions, providing a structured mechanism for potential share acquisitions. This agreement is commonly used in business scenarios where parties wish to establish future share purchase rights, such as in investment rounds, succession planning, or strategic corporate arrangements. Under Malaysian law, particularly the Companies Act 2016 and Contract Act 1950, the agreement must include specific provisions regarding share transfer restrictions, regulatory compliance, and corporate governance requirements. The document typically becomes relevant in situations involving strategic investments, corporate restructuring, or when companies wish to provide key stakeholders with future ownership opportunities. It requires careful consideration of Malaysian securities laws, tax implications, and corporate regulatory requirements.
Suggested Sections

1. Parties: Identification of all parties to the agreement including the option holder and option grantor

2. Background: Context of the agreement, including company details and reason for the call option arrangement

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

4. Grant of Call Option: Core terms of the call option, including the number of shares subject to the option

5. Option Period: Duration of the option and conditions for exercise

6. Exercise Price: Specification of the price at which shares can be purchased under the option

7. Exercise Procedure: Process and requirements for exercising the call option

8. Completion of Share Transfer: Procedures for completing the share transfer upon option exercise

9. Representations and Warranties: Standard warranties regarding authority, ownership and capacity

10. Confidentiality: Obligations regarding confidential information

11. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

Optional Sections

1. Tag-Along Rights: Optional provision allowing other shareholders to join in the sale under certain conditions

2. Drag-Along Rights: Optional provision forcing minority shareholders to join in a sale under certain conditions

3. Non-Competition: Restrictions on competitive activities, included when parties are business competitors

4. Pre-emptive Rights: Rights of existing shareholders to purchase shares before they can be sold to third parties

5. Valuation Mechanism: Detailed procedures for determining share value, needed when price isn't fixed

6. Force Majeure: Provisions dealing with unforeseen circumstances, included for longer-term options

7. Anti-dilution Protection: Protections against share dilution, important for minority shareholders

Suggested Schedules

1. Share Details: Details of shares subject to the option including class, number, and current ownership

2. Company Information: Key company details including registration number, registered office, and share capital structure

3. Form of Option Exercise Notice: Template notice for exercising the call option

4. Deed of Adherence: Form for new shareholders to agree to existing shareholders agreement terms

5. Share Transfer Form: Template form for executing the share transfer

6. Calculation of Exercise Price: If applicable, detailed methodology for calculating the exercise price

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

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 Industries

Financial Services

Technology

Manufacturing

Real Estate

Private Equity

Venture Capital

Professional Services

Retail

Healthcare

Education

Energy

Telecommunications

Relevant Teams

Legal

Corporate Finance

Mergers & Acquisitions

Compliance

Corporate Secretarial

Investment

Business Development

Executive Management

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Legal Counsel

Investment Manager

Company Secretary

Corporate Finance Manager

Business Development Director

Mergers & Acquisitions Manager

Compliance Officer

Investment Banker

Private Equity Manager

Venture Capital Manager

Board Director

Managing Director

Industries
Companies Act 2016: Primary legislation governing company operations in Malaysia, including provisions for share transfers, shareholders' rights and obligations, and corporate governance requirements
Contract Act 1950: Fundamental law governing contract formation, validity, and enforcement in Malaysia, essential for the basic structure and enforceability of the shareholders agreement
Capital Markets and Services Act 2007: Regulates securities and financial markets in Malaysia, relevant for share options particularly if involving public listed companies or regulated activities
Income Tax Act 1967: Governs taxation matters including tax implications of share transfers and option exercises, affecting how the transaction should be structured
Stamp Act 1949: Requires proper stamping of share transfer instruments and agreements to ensure legal validity and enforceability
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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