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Equity Agreement Contract Template for India

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Key Requirements PROMPT example:

Equity Agreement Contract

"I need an Equity Agreement Contract for my tech startup to issue Series A preferred shares worth $2 million to a venture capital firm, including standard anti-dilution protection and board representation rights, with completion planned for March 2025."

Document background
The Equity Agreement Contract is a fundamental document in Indian corporate transactions, used when companies issue new shares or when existing shares are being transferred between parties. This agreement is essential for documenting share ownership, investment terms, and shareholder rights in compliance with Indian corporate law. It's commonly used in funding rounds, strategic investments, or ownership restructuring, requiring careful consideration of the Companies Act 2013, SEBI regulations, and if applicable, FEMA guidelines for foreign investments. The document typically includes detailed provisions on share valuation, transfer mechanics, shareholder rights, governance structures, and exit mechanisms, making it crucial for both domestic and international investment transactions in Indian companies.
Suggested Sections

1. Parties: Identification of all parties to the agreement including the company, existing shareholders, and new investors

2. Background: Context of the transaction, including company history and purpose of the equity investment

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Share Details and Consideration: Specifics of shares being issued/transferred, including class, number, price per share, and total consideration

5. Completion Mechanics: Steps for completing the transaction, including conditions precedent, completion actions, and timing

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

7. Covenants: Ongoing obligations of the parties, including company management and operational matters

8. Transfer Restrictions: Limitations on transfer of shares and process for permitted transfers

9. Termination: Circumstances under which the agreement can be terminated and consequences

10. Confidentiality: Obligations regarding confidential information and announcements

11. Notices: Process and requirements for formal communications between parties

12. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

13. General Provisions: Standard boilerplate clauses including amendments, waivers, and severability

Optional Sections

1. Pre-emptive Rights: Rights of existing shareholders to participate in future funding rounds - include when there are multiple shareholders

2. Tag-Along Rights: Rights of minority shareholders to join in sale of shares - include when protecting minority interests

3. Drag-Along Rights: Rights of majority shareholders to force minority to join in sale - include for exit planning

4. Board Composition: Rights to appoint directors and board structure - include when investors get board seats

5. Reserved Matters: List of actions requiring special approval - include for significant investments

6. Anti-dilution Protection: Protection against dilution in down rounds - include for VC/PE investments

7. FEMA Compliance: Special provisions for foreign investment compliance - include with foreign investors

8. Information Rights: Rights to receive company information - include for significant minority investments

Suggested Schedules

1. Schedule 1 - Details of the Company: Corporate information including registration details, share capital structure, and existing shareholders

2. Schedule 2 - Conditions Precedent: List of conditions to be satisfied before completion

3. Schedule 3 - Completion Requirements: Detailed list of documents and actions required at completion

4. Schedule 4 - Warranties: Detailed warranties given by the company and existing shareholders

5. Schedule 5 - Reserved Matters: Detailed list of matters requiring special approval

6. Schedule 6 - Registration Rights: Details of rights relating to registration of shares

7. Schedule 7 - Company Accounts: Latest financial statements and management accounts

8. Appendix A - Share Certificate Format: Format of share certificates to be issued

9. Appendix B - Board Resolution Format: Format of board resolutions required for completion

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













































Clauses






























Relevant Industries

Technology and Software

Manufacturing

Financial Services

Healthcare and Pharmaceuticals

E-commerce

Retail

Real Estate

Infrastructure

Education

Professional Services

Media and Entertainment

Telecommunications

Renewable Energy

Biotechnology

Agriculture Technology

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Corporate Development

Investment

Board of Directors

Executive Leadership

Risk Management

Corporate Governance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Manager

Private Equity Manager

Venture Capital Associate

Compliance Officer

Director of Corporate Development

Investment Banker

Due Diligence Officer

Board Director

Managing Director

Finance Director

Industries








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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