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Founder Repurchase Agreement Template for England and Wales

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Key Requirements PROMPT example:

Founder Repurchase Agreement

"I need a Founder Repurchase Agreement for our Series B technology company to buy back shares from our departing CTO founder, who owns 25% of the company, with completion planned for March 2025 and payment structured over 18 months."

Document background
The Founder Repurchase Agreement is a crucial document used when a company wishes to buy back shares from its founding member(s). Commonly implemented during founder exits, succession planning, or corporate restructuring, this agreement, governed by English and Welsh law, details the complete transaction process, including share valuation, payment terms, and both parties' obligations. It ensures compliance with Companies Act 2006 and corporate governance requirements while addressing tax implications and potential ongoing restrictions on the founder's future activities.
Suggested Sections

1. Parties: Identifies the company and the founder(s) involved in the repurchase

2. Background: Context of founder's shareholding and reason for repurchase

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase: Core terms of the share repurchase transaction

5. Consideration: Purchase price and payment terms

6. Completion: Timing and mechanics of the transaction

7. Warranties: Basic warranties regarding share ownership and authority to sell

Optional Sections

1. Non-Compete Provisions: Restrictions on founder's future business activities, used when protecting company's business interests post-exit

2. Confidentiality: Provisions protecting company information, used when founder had access to sensitive information

3. Tax Indemnities: Protection against tax liabilities, used when complex tax implications exist

4. Continuing Obligations: Ongoing duties of founder, used when founder retains connection to company

Suggested Schedules

1. Schedule 1 - Share Details: Specific details of shares being repurchased including class, number, and nominal value

2. Schedule 2 - Completion Obligations: List of actions and documents required at completion

3. Schedule 3 - Form of Resignation: Template resignation letter if founder is also resigning from positions

4. Schedule 4 - Tax Calculations: Detailed breakdown of tax implications and calculations

5. Schedule 5 - Board Minutes: Form of board resolution approving the share repurchase

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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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Core legislation governing company operations including share capital rules, directors' duties (Sections 171-177), share buyback provisions (Sections 690-708), financial assistance rules, and capital maintenance requirements

Financial Services and Markets Act 2000: Regulations concerning financial services activities and financial promotion restrictions that may apply to the share repurchase

Employment Rights Act 1996: Employment law considerations relevant when the founder has also been an employee of the company

Tax Legislation: Including Income Tax Act 2007, Corporation Tax Act 2010, Capital Gains Tax considerations, and Stamp Duty implications for the share repurchase

Contract Law: Common law principles of contract formation and The Law of Property (Miscellaneous Provisions) Act 1989 governing the agreement's validity

Corporate Governance Framework: Internal company regulations including Articles of Association, shareholders' agreements, and pre-emption rights that may affect the repurchase

Insolvency Act 1986: Legal framework ensuring the company's solvency and ability to legally execute the share repurchase

Data Protection Laws: GDPR and Data Protection Act 2018 requirements for handling personal data in the agreement

Competition Law: Regulations governing market competition that may be relevant if the repurchase could affect market dynamics

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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