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Basic Shareholder Agreement
"I need a Basic Shareholder Agreement for my new tech startup launching in March 2025, with three founding shareholders having equal ownership, including provisions for future investment rounds and protection of intellectual property."
1. Parties: Identifies all shareholders and the company as parties to the agreement
2. Background: Sets out the context of the agreement, including company details and purpose of the agreement
3. Definitions and Interpretation: Defines key terms used throughout the agreement and interpretation rules
4. Share Ownership and Capital Structure: Details current shareholding structure and classes of shares
5. Shareholders' Rights and Obligations: Outlines basic rights and responsibilities of shareholders
6. Transfer of Shares: Establishes general rules and restrictions for transferring shares
7. Pre-emptive Rights: Process for existing shareholders to have first right to purchase shares being sold
8. Management and Decision Making: Covers voting rights and decision-making processes for key company matters
9. Meetings and Resolutions: Procedures for shareholder meetings and passing resolutions
10. Confidentiality: Obligations regarding confidential information
11. Dispute Resolution: Process for resolving disagreements between shareholders
12. Term and Termination: Duration of agreement and circumstances for termination
13. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law
1. Tag-Along Rights: Used when minority shareholders should have the right to join in sales by majority shareholders
2. Drag-Along Rights: Include when majority shareholders should be able to force minorities to join in a sale
3. Share Valuation: Include detailed valuation mechanisms for private companies
4. Dividend Policy: Include if specific dividend distribution rules are needed
5. Non-Compete and Non-Solicitation: Add for shareholders who are also involved in business operations
6. Board Representation: Include if certain shareholders should have board appointment rights
7. Dead Lock Resolution: Important for 50/50 ownership structures
8. Put and Call Options: Include if shareholders want specific share purchase rights in certain circumstances
1. Schedule 1: Company Details: Details of the company including registration number, registered office, and current directors
2. Schedule 2: Current Shareholding: List of all shareholders and their current shareholdings
3. Schedule 3: Reserved Matters: List of decisions requiring special majority or unanimous approval
4. Schedule 4: Share Valuation Methodology: Detailed process for valuing shares for transfers or exits
5. Schedule 5: Deed of Adherence: Template for new shareholders to sign up to the agreement
6. Appendix A: Company Constitution: Copy of or reference to the current company constitution
Authors
Board
Business
Business Day
Company
Companies Act
Completion
Confidential Information
Constitution
Dead Lock
Director
Encumbrance
Fair Value
Financial Year
Group
Independent Expert
Insolvency Event
Material Breach
New Shareholder
Ordinary Resolution
Original Shareholders
Parties
Pre-emptive Rights
Related Company
Reserved Matters
Share Transfer Notice
Shares
Shareholder
Special Resolution
Subsidiary
Tag-Along Notice
Tag-Along Rights
Transfer
Valuation Date
Working Day
Share Capital
Share Transfer
Pre-emptive Rights
Tag-Along Rights
Drag-Along Rights
Issue of New Shares
Corporate Governance
Board Composition
Shareholder Meetings
Voting Rights
Reserved Matters
Management Rights
Information Rights
Dividend Policy
Non-Competition
Non-Solicitation
Confidentiality
Financial Matters
Exit Provisions
Dispute Resolution
Dead Lock Resolution
Default
Termination
Put and Call Options
Valuation
Anti-Dilution
Assignment
Notices
Governing Law
Severability
Entire Agreement
Amendment
Force Majeure
Technology
Retail
Manufacturing
Professional Services
Healthcare
Real Estate
Financial Services
Agriculture
Construction
Hospitality
Education
Media and Entertainment
Transport and Logistics
Energy
Mining
Legal
Corporate Governance
Executive Leadership
Finance
Compliance
Company Secretariat
Board of Directors
Shareholder Relations
Investment Relations
Chief Executive Officer
Managing Director
Company Director
Corporate Lawyer
Legal Counsel
Company Secretary
Chief Financial Officer
Business Owner
Entrepreneur
Investment Manager
Corporate Governance Officer
Compliance Manager
Board Member
Shareholder Relations Manager
Business Development Manager
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