Equity Funding Agreement Template for Singapore

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Key Requirements PROMPT example:

Equity Funding Agreement

"I need an Equity Funding Agreement for my Singapore-based fintech startup to secure Series A funding of SGD 5 million from a venture capital firm, with anti-dilution protection and board appointment rights, to be completed by March 2025."

Document background
The Equity Funding Agreement is essential for any Singapore-based company seeking to raise capital through equity investment. This document serves as the primary contract governing the relationship between investors and the company, outlining crucial elements such as investment terms, shareholding rights, and investor protections. It must comply with Singapore's robust regulatory framework, including the Companies Act and MAS guidelines, making it particularly suitable for both local and international investment transactions. The agreement typically includes detailed provisions on share valuation, anti-dilution protection, board representation, and exit rights.
Suggested Sections

1. Parties: Identification of the company, investor(s), and any other relevant parties

2. Background: Context of the investment, company status, and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Investment Terms: Amount, valuation, and share class details

5. Completion Mechanics: Process and conditions for closing the investment

6. Warranties and Representations: Standard company and investor warranties

7. Governing Law and Jurisdiction: Singapore law provisions and dispute resolution

Optional Sections

1. Anti-Dilution Rights: Protection against future down rounds - typically included when requested by sophisticated investors

2. Board Appointment Rights: Investor's right to appoint directors - typically included for significant investment amounts

3. Tag-Along Rights: Right to join in sale of shares - included for minority investor protection

4. Drag-Along Rights: Majority shareholders' right to force sale - included for majority investor protection

Suggested Schedules

1. Cap Table: Pre and post-investment shareholding structure

2. Conditions Precedent: List of conditions to be satisfied before completion

3. Warranties: Detailed company warranties

4. Completion Documents: List of documents required at completion

5. New Constitution: Constitutional amendments required when new share classes are created

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
Industries

Companies Act (Cap. 50): Primary legislation governing company formation, operation, and regulation in Singapore, including share issuance, shareholders' rights, and corporate governance requirements

Securities and Futures Act (Cap. 289): Regulates securities offerings, financial market activities, and investor protection measures in Singapore

Financial Advisers Act (Cap. 110): Governs the provision of financial advisory services and regulates financial advisers in Singapore

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore covering various aspects of financial services and corporate governance

SGX Listing Rules: Requirements and regulations for companies listed or seeking listing on the Singapore Exchange

Code of Corporate Governance: Principles and guidelines for corporate governance practices in Singapore companies

Income Tax Act: Legislation governing taxation of income, including corporate tax implications for equity investments

Stamp Duties Act: Regulates stamp duties payable on share transfers and other equity-related transactions

Personal Data Protection Act (PDPA): Governs the collection, use, and disclosure of personal data in Singapore, relevant for investor information

Anti-Money Laundering Regulations: Requirements for preventing and detecting money laundering in financial transactions and investments

Competition Act: Regulates anti-competitive practices and mergers that may substantially lessen competition in Singapore

Singapore Common Law: Principles of contract law and precedents established through court decisions that affect equity agreements

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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