Document background
The Equity Participation Agreement is a fundamental document used when an investor acquires ownership in a German company, whether through direct share purchase or new share issuance. It is essential for transactions ranging from venture capital investments to strategic corporate partnerships, typically used when investors seek minority or majority stakes in private companies. The agreement must comply with German corporate law, particularly focusing on requirements under the GmbH-Gesetz for limited liability companies or Aktiengesetz for stock corporations. It covers crucial elements such as share transfer mechanics, corporate governance rights, information rights, and exit provisions. The document is particularly important in the German market given its specific legal requirements around share transfers, notarization requirements, and corporate governance structures.
