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Company Ownership Contract Template for England and Wales

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Key Requirements PROMPT example:

Company Ownership Contract

"I need a Company Ownership Contract for my tech startup with three co-founders, where we want to include specific provisions for future investment rounds and a clear exit strategy in case any founder wants to leave by March 2025."

Document background
The Company Ownership Contract serves as the foundational document for establishing and managing company ownership under English and Welsh law. This agreement is essential when setting up a new company, restructuring ownership, or bringing in new shareholders. It includes detailed provisions for share ownership, voting rights, management participation, and exit strategies. The contract ensures compliance with UK company law while protecting shareholders' interests and providing clear governance structures.
Suggested Sections

1. Parties: Identification of all parties involved in the ownership agreement, including full legal names and registered addresses

2. Background: Context of the agreement, including company details and purpose of the ownership arrangement

3. Definitions: Defined terms used throughout the agreement, including technical and legal terminology

4. Share Structure: Detailed provisions regarding share classes, rights attached to shares, and share capital structure

5. Transfer Restrictions: Rules and procedures governing the transfer of shares, including pre-emption rights and approval requirements

6. Management Rights: Decision-making processes, voting rights, and management structure of the company

7. Exit Provisions: Procedures and terms for shareholder exits, including share sale processes and valuation methods

Optional Sections

1. Tag-Along Rights: Provisions allowing minority shareholders to join in the sale of shares on the same terms as majority shareholders

2. Drag-Along Rights: Provisions enabling majority shareholders to force minority shareholders to join in a company sale

3. Non-Compete Provisions: Restrictions on shareholders engaging in competitive activities during and after their ownership

4. Dividend Policy: Framework for determining and distributing company dividends to shareholders

5. Deadlock Resolution: Procedures for resolving situations where shareholders cannot reach agreement on key decisions

Suggested Schedules

1. Schedule 1 - Share Capital Table: Detailed breakdown of shareholdings, including number of shares, classes, and percentage ownership

2. Schedule 2 - Articles of Association: Current or amended Articles of Association of the company

3. Schedule 3 - Shareholders' Information: Complete details of all shareholders including PSC (People with Significant Control) information

4. Schedule 4 - Reserved Matters: List of decisions requiring special majority or unanimous shareholder approval

5. Schedule 5 - Deed of Adherence: Template document for new shareholders to sign when joining the agreement

Authors

Alex Denne

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

Relevant legal definitions


































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Industries

Companies Act 2006: Primary legislation governing company formation, share capital, ownership structures, shareholder rights, company constitution requirements, and directors' duties and responsibilities

Small Business, Enterprise and Employment Act 2015: Legislation covering transparency of company ownership and People with Significant Control (PSC) requirements

Financial Services and Markets Act 2000: Regulations concerning regulated activities and investment considerations in company ownership

Companies (Model Articles) Regulations 2008: Secondary legislation providing standard articles of association and shareholder rights framework

The Companies (Shareholders' Rights) Regulations 2009: Specific regulations governing shareholders' rights and protections in company ownership

UK Corporate Governance Code: Guidelines for corporate governance practices, particularly relevant for larger companies

Wates Corporate Governance Principles: Corporate governance principles specifically designed for large private companies

Corporation Tax Act 2010: Tax legislation affecting company ownership and corporate structures

Income Tax Act 2007: Tax regulations affecting individual shareholders and dividend distributions

Competition Act 1998: Legislation governing competition law aspects of company ownership and market concentration

Enterprise Act 2002: Framework for merger control and competition considerations in company ownership

UK GDPR: Data protection regulations affecting company information handling and shareholder data

Data Protection Act 2018: UK-specific data protection requirements for handling company and shareholder information

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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