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Business Equity Agreement

Business Equity Agreement Template for New Zealand

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Key Requirements PROMPT example:

Business Equity Agreement

"I need a Business Equity Agreement for my New Zealand tech startup to bring in a new angel investor who will invest NZD 500,000 for a 20% stake, with the deal expected to close by March 2025 and including tag-along rights for existing shareholders."

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Document background
The Business Equity Agreement is a crucial legal document used when establishing or modifying ownership structures in New Zealand businesses. It is particularly relevant for companies seeking investment, implementing ownership changes, or establishing new business partnerships. This agreement, governed by New Zealand law, provides a comprehensive framework for equity arrangements, covering essential aspects such as share issuance, shareholder rights, governance structures, and exit provisions. It ensures compliance with key legislation including the Companies Act 1993 and Financial Markets Conduct Act 2013, while protecting the interests of all parties involved. The document is commonly used in investment rounds, business restructuring, and when bringing in new shareholders or strategic partners.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including full legal names, addresses, and company details

2. Background: Context of the agreement, including current company structure and purpose of the equity arrangement

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Investment Terms: Details of the equity investment, including amount, share class, and price per share

5. Share Issuance and Transfer: Terms governing the issuance of new shares or transfer of existing shares

6. Representations and Warranties: Statements of fact and assurances from all parties regarding their capacity and authority

7. Shareholders' Rights: Voting rights, dividend rights, and other shareholder entitlements

8. Management and Control: Governance structure, board composition, and decision-making processes

9. Pre-emptive Rights: Rights of existing shareholders regarding future share issues or transfers

10. Exit Provisions: Terms governing the sale of shares, including drag-along and tag-along rights

11. Confidentiality: Obligations regarding confidential information and trade secrets

12. Dispute Resolution: Process for resolving disputes between parties

13. General Provisions: Standard legal provisions including notices, amendments, and governing law

Optional Sections

1. Anti-dilution Protection: Protection for investors against future dilution of their shareholding, used when dealing with sophisticated investors

2. Intellectual Property Rights: Specific provisions regarding IP ownership and licenses, relevant for technology companies

3. Employee Share Scheme: Terms for employee share ownership programs, if applicable

4. International Considerations: Additional provisions for cross-border investments or foreign investors

5. Put and Call Options: Specific rights to sell or buy shares under certain conditions

6. Performance Rights: Provisions linking equity to performance metrics, useful for founder or key employee agreements

7. Tag-Along and Drag-Along Rights: Detailed provisions for minority shareholder protection and majority shareholder exit rights

8. Deadlock Resolution: Specific procedures for resolving deadlock situations, important for 50/50 ownership structures

Suggested Schedules

1. Schedule 1: Share Capital Structure: Detailed breakdown of current and post-investment share capital structure

2. Schedule 2: Shareholders' Particulars: Complete details of all shareholders including shareholding percentages

3. Schedule 3: Company Information: Key company information including registration details, directors, and registered office

4. Schedule 4: Business Plan: Current business plan and financial projections

5. Schedule 5: Reserved Matters: List of decisions requiring special majority or unanimous approval

6. Schedule 6: Share Valuation Methodology: Agreed method for valuing shares for future transfers or exits

7. Appendix A: Share Certificate Form: Template for share certificates

8. Appendix B: Share Transfer Form: Standard form for transferring shares

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 legal definitions
Agreement
Board
Business
Business Day
Business Plan
Company
Completion
Completion Date
Confidential Information
Constitution
Director
Drag-Along Notice
Drag-Along Right
Effective Date
Encumbrance
Event of Default
Exercise Notice
Exercise Period
Exercise Price
Existing Shareholders
Fair Market Value
Financial Year
Group
Intellectual Property Rights
Investment Amount
Investor
Issue Price
Major Transaction
Management
Material Adverse Change
New Shares
Ordinary Shares
Parties
Pre-emptive Rights
Preference Shares
Related Company
Reserved Matters
Share Capital
Shareholder
Shareholders' Agreement
Shares
Subscriber
Subscription Amount
Subscription Shares
Tag-Along Notice
Tag-Along Right
Transfer
Valuation
Voting Rights
Clauses
Share Subscription
Share Transfer
Pre-emptive Rights
Investment Terms
Payment Terms
Representations and Warranties
Share Capital Structure
Shareholder Rights
Voting Rights
Board Composition
Management Rights
Reserved Matters
Dividend Policy
Tag-Along Rights
Drag-Along Rights
Information Rights
Confidentiality
Non-Competition
Anti-Dilution Protection
Exit Rights
Put and Call Options
Default Events
Dispute Resolution
Deadlock Provisions
Transfer Restrictions
Valuation Mechanisms
Right of First Refusal
Compliance Requirements
Intellectual Property
Amendments and Waivers
Governing Law
Force Majeure
Termination Rights
Indemnification
Assignment
Notices
Costs and Expenses
Relevant Industries

Technology

Manufacturing

Professional Services

Retail

Healthcare

Financial Services

Real Estate

Agriculture

Construction

Education

Environmental Services

Media and Entertainment

Transport and Logistics

Mining and Resources

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Board of Directors

Investment

Compliance

Corporate Governance

Business Development

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Director

Corporate Lawyer

Investment Manager

Business Development Manager

Company Secretary

Financial Controller

Legal Counsel

Compliance Officer

Investment Analyst

Managing Partner

Board Member

Venture Capital Manager

Private Equity Manager

Corporate Finance Manager

Industries
Companies Act 1993: Primary legislation governing company formation, structure, and governance in New Zealand. Crucial for equity arrangements, shareholder rights, and company obligations.
Financial Markets Conduct Act 2013: Regulates financial markets and securities, including equity offerings and transfer of ownership interests. Important for compliance with securities laws and disclosure requirements.
Contract and Commercial Law Act 2017: Provides the legal framework for contract formation and enforcement, essential for the validity and enforceability of the equity agreement.
Fair Trading Act 1986: Ensures fair trading practices and prevents misleading conduct in business transactions, including equity deals and business representations.
Income Tax Act 2007: Covers tax implications of equity transfers, share issuance, and business ownership changes.
Financial Reporting Act 2013: Sets requirements for financial reporting and accountability, particularly relevant for company valuation and equity calculations.
Limited Partnerships Act 2008: May be relevant if the business structure involves a limited partnership arrangement rather than a standard company structure.
Overseas Investment Act 2005: Important if any parties to the equity agreement are overseas investors or entities.
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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