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Equity In Exchange For Services Agreement Template for India

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Key Requirements PROMPT example:

Equity In Exchange For Services Agreement

"I need an Equity in Exchange for Services Agreement for my Mumbai-based technology startup to engage a senior software architect who will develop our core platform in exchange for 3% equity, with the service period starting March 2025."

Document background
The Equity In Exchange For Services Agreement is commonly used in the Indian business environment where companies, particularly startups and growing businesses, seek to acquire professional services while conserving cash resources. This document is essential when organizations want to compensate service providers through equity ownership instead of cash payment, particularly for high-value services such as technology development, consulting, or specialized professional services. The agreement must comply with Indian regulatory requirements, including the Companies Act 2013, SEBI regulations, and relevant tax laws. It typically includes detailed specifications of the services, equity valuation methodology, vesting schedules if applicable, and necessary corporate approvals. This arrangement is particularly valuable for companies in growth phases who want to align service providers' interests with long-term company success.
Suggested Sections

1. Parties: Identification of the company and the service provider with complete details

2. Background: Context of the agreement, including company's need for services and intention to issue equity

3. Definitions: Key terms used throughout the agreement

4. Services: Detailed description of services to be provided, including scope, timeline, and deliverables

5. Equity Compensation: Details of equity to be issued, including number of shares, class, and valuation

6. Service Provider's Obligations: Specific responsibilities, performance standards, and commitments

7. Company's Obligations: Company's commitments regarding equity issuance and support for services

8. Representations and Warranties: Statements of fact and assurances from both parties

9. Compliance and Regulatory Requirements: Obligations regarding corporate, securities, and tax laws

10. Term and Termination: Duration of agreement and circumstances for termination

11. Confidentiality: Protection of sensitive information exchanged during the engagement

12. Dispute Resolution: Process for handling disagreements and jurisdiction details

13. General Provisions: Standard clauses including notices, amendments, and governing law

Optional Sections

1. Foreign Investment Compliance: Required when service provider is a foreign entity, addressing FEMA compliance

2. Intellectual Property Rights: Needed when services involve creation of IP or use of existing IP

3. Non-Competition: Relevant when protecting company's business interests is crucial

4. Lock-in Period: Optional restrictions on transfer of issued shares

5. Tag-Along Rights: Rights for minority shareholders in case of stake sale

6. Board Seat/Observer Rights: When service provider is to be given board representation

7. Performance Milestones: When equity issuance is tied to specific performance targets

8. Exit Rights: Mechanisms for service provider to sell shares in future

Suggested Schedules

1. Schedule A - Service Description: Detailed scope of services, deliverables, and timelines

2. Schedule B - Equity Terms: Details of share class, rights, and valuation methodology

3. Schedule C - Performance Metrics: Specific KPIs and evaluation criteria for services

4. Schedule D - Compliance Checklist: Required corporate and regulatory approvals

5. Schedule E - Share Transfer Restrictions: Detailed terms of lock-in and transfer limitations

6. Appendix 1 - Board Resolution: Copy of board resolution approving equity issuance

7. Appendix 2 - Valuation Report: Independent valuation report for share pricing

8. Appendix 3 - Service Provider's Credentials: Documentation of service provider's qualifications and experience

Authors

Alex Denne

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

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Relevant Industries

Technology

Professional Services

Consulting

Start-ups

E-commerce

Healthcare

Financial Services

Education Technology

Manufacturing

Real Estate

Media and Entertainment

Retail

Information Technology

Business Services

Relevant Teams

Legal

Finance

Corporate Development

Human Resources

Executive Leadership

Corporate Secretarial

Business Development

Strategy

Operations

Compliance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Company Secretary

Chief Operating Officer

Business Development Director

Strategy Consultant

Technology Consultant

Professional Service Provider

Management Consultant

Human Resources Director

Finance Director

Corporate Development Manager

Investment Manager

Startup Founder

Entrepreneur

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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