Company Equity Share Agreement

Company Equity Share Agreement Template for Canada

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Key Requirements PROMPT example:

"I need a Company Equity Share Agreement for my Canadian technology startup to issue Series A preferred shares to three venture capital investors, with specific drag-along and tag-along rights, to be completed before March 2025."

Document background

The Company Equity Share Agreement is a fundamental document used in Canadian corporate structuring when establishing or modifying share ownership arrangements. It becomes necessary when companies issue new shares, bring in new shareholders, or formalize existing shareholder relationships. The agreement must comply with both federal legislation (primarily the Canada Business Corporations Act) and provincial securities laws, making it essential to consider jurisdictional requirements. This document typically includes detailed provisions on share rights, transfer restrictions, shareholder protections, and corporate governance mechanisms. It's particularly crucial for private companies, startups seeking investment, and businesses implementing employee share ownership programs. The agreement serves as a cornerstone document that helps prevent future disputes by clearly defining all parties' rights and obligations regarding company ownership.

Suggested Sections

1. Parties: Identification of the company and all shareholders entering into the agreement

2. Background: Context of the agreement, including company information and purpose of the share issuance

3. Definitions: Defined terms used throughout the agreement

4. Share Subscription: Details of shares being issued, including class, number, and price

5. Payment Terms: Terms and method of payment for the shares

6. Representations and Warranties: Statements of fact and assurances from both the company and shareholders

7. Share Rights and Restrictions: Voting rights, dividend rights, and any restrictions on the shares

8. Transfer Restrictions: Limitations and conditions on the transfer of shares

9. Right of First Refusal: Process for existing shareholders to purchase shares before they can be sold to third parties

10. Tag-Along Rights: Right of minority shareholders to join in the sale of shares by majority shareholders

11. Drag-Along Rights: Right of majority shareholders to force minority shareholders to join in the sale of shares

12. Confidentiality: Obligations regarding confidential information

13. Dispute Resolution: Process for resolving disputes between parties

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

Optional Sections

1. Pre-emptive Rights: Right of existing shareholders to maintain their ownership percentage by participating in new share issuances

2. Share Vesting: For agreements involving employee shares, specifying vesting schedule and conditions

3. Board Representation: Rights of shareholders to appoint board members

4. Anti-Dilution Protection: Provisions protecting shareholders from dilution in future financing rounds

5. Put and Call Options: Rights to force purchase or sale of shares under specific conditions

6. Non-Competition and Non-Solicitation: Restrictions on competitive activities when shareholders are also employees

7. Management Rights: Special rights granted to certain shareholders regarding company management

8. Information Rights: Rights of shareholders to receive specific company information and financial reports

Suggested Schedules

1. Schedule A - Share Capital: Detailed breakdown of the company's share capital structure

2. Schedule B - Shareholder Information: List of shareholders with their respective shareholdings and contact information

3. Schedule C - Share Certificate: Form of share certificate to be issued

4. Schedule D - Deed of Adherence: Form for new shareholders to agree to the terms of the agreement

5. Schedule E - Permitted Transfers: List of permitted share transfer scenarios and recipients

6. Schedule F - Subscription Price Calculation: Methodology for calculating share subscription price

7. Appendix 1 - Corporate Information: Company's corporate details, including registration information and directors

8. Appendix 2 - Shareholders' Resolutions: Required shareholder resolutions approving the share issuance

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Technology and Software

Professional Services

Financial Services

Manufacturing

Real Estate

Healthcare

Retail and Consumer Goods

Energy and Resources

Media and Entertainment

Telecommunications

Biotechnology

Consulting Services

Private Equity and Venture Capital

Relevant Teams

Legal

Finance

Corporate Governance

Executive Leadership

Human Resources

Compliance

Investment

Board of Directors

Shareholder Relations

Corporate Affairs

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Secretary

General Counsel

Legal Counsel

Corporate Lawyer

Investment Manager

Board Director

Managing Director

Shareholder Relations Manager

Corporate Governance Officer

Compliance Officer

HR Director

Finance Director

Company Secretary

Investment Banker

Private Equity Manager

Venture Capital Manager

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Let's create your Company Equity Share Agreement

Authors

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