Equity Contribution Agreement Template for United States

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Key Requirements PROMPT example:

Equity Contribution Agreement

"I need an Equity Contribution Agreement for a Series A investment of $5 million into my tech startup, with standard anti-dilution protection and board representation rights for the investor, to be completed by March 2025."

Document background
An Equity Contribution Agreement serves as the foundational document for capital investments in exchange for equity ownership. This agreement type is commonly used in the United States when investors seek to make significant capital contributions to businesses, whether startups or established companies. The document specifies the amount and form of contribution, resulting ownership structure, and rights and obligations of all parties. It must comply with U.S. federal securities laws and state-specific regulations, particularly regarding registration requirements and exemptions. The agreement typically includes detailed provisions about valuation, anti-dilution protection, and governance rights.
Suggested Sections

1. Parties: Identification of the contributing parties and the receiving entity

2. Background: Context of the equity contribution and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Contribution Details: Specific details of equity contribution including amount, form, and timing

5. Representations and Warranties: Statements of fact and assurances from all parties

6. Closing Conditions: Prerequisites that must be met before contribution completion

7. Governing Law: Jurisdiction and applicable law

Optional Sections

1. Anti-dilution Provisions: Protection against future dilution of ownership - include when contributor requires protection against future equity issuances

2. Tag-Along Rights: Right to join in sale of shares by other shareholders - include for minority shareholders seeking exit rights

3. Registration Rights: Rights regarding registration of securities - include when contributor may want to sell securities publicly in future

Suggested Schedules

1. Contribution Schedule: Detailed breakdown of equity contribution including valuation

2. Corporate Documents: Copies of relevant corporate authorizations and resolutions

3. Disclosure Schedule: Exceptions to representations and warranties

4. Form of Stock Certificate: Template of stock certificate to be issued

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

Securities Act of 1933: Federal law governing the initial offering and sale of securities, requiring registration and disclosure unless an exemption applies

Securities Exchange Act of 1934: Federal law regulating secondary trading of securities and establishing the SEC

Investment Company Act of 1940: Federal law regulating investment companies and mutual funds

Regulation D: SEC rules providing exemptions from federal registration requirements for private placements

Rule 144: SEC rule governing the resale of restricted securities

Blue Sky Laws: State-specific securities laws governing registration, disclosure requirements, and exemptions

Delaware General Corporation Law: Primary corporate law statute for Delaware corporations, often used as a model for corporate governance

Internal Revenue Code: Federal tax laws governing the tax treatment of equity contributions and related transactions

Section 351: IRC provision governing tax-free contributions to corporations in exchange for stock

Federal Reserve Regulations: Banking regulations that may affect equity contributions involving financial institutions

Hart-Scott-Rodino Act: Antitrust law requiring pre-merger notifications for larger transactions

ERISA: Employee Retirement Income Security Act governing employee benefit plans and related equity arrangements

IRC Section 409A: Tax provisions governing deferred compensation arrangements, including certain equity-based compensation

FIRPTA: Foreign Investment in Real Property Tax Act governing foreign investment in U.S. real estate

CFIUS Regulations: Committee on Foreign Investment in the United States regulations governing foreign investments for national security concerns

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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