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An Equity Agreement spells out how ownership stakes are divided among shareholders in a Nigerian company. It's a binding contract that details who owns what percentage of the business, including key terms about voting rights, share transfers, and profit distribution.

Under Nigerian corporate law, these agreements protect both majority and minority shareholders by setting clear rules for important decisions, exit options, and management participation. They're especially crucial for startups and small businesses seeking investment, as they help prevent future disputes and align with requirements from the Corporate Affairs Commission (CAC).

Create an Equity Agreement when you're starting a new business venture in Nigeria or bringing in new shareholders. This is essential before accepting investments, particularly when dealing with venture capital firms or angel investors who need clear documentation of their ownership stakes.

Use it when structuring complex ownership arrangements, like employee stock options or family business transitions. The agreement becomes vital during major company changes - mergers, acquisitions, or when expanding your shareholder base. Nigerian business law requires proper documentation of ownership interests, and having this agreement in place helps avoid costly disputes while ensuring compliance with CAC regulations.

• Basic Equity Agreement: Standard version that outlines fundamental ownership rights, voting powers, and profit-sharing arrangements between shareholders
• Startup Investment Agreement: Focuses on early-stage companies, including special provisions for venture capital funding and future funding rounds
• Family Business Agreement: Tailored for family-owned enterprises with succession planning and inheritance considerations
• Employee Share Ownership Plan (ESOP): Structures equity distribution to employees with vesting schedules and performance conditions
• Joint Venture Equity Agreement: Details ownership stakes and responsibilities between multiple corporate partners in Nigerian joint ventures

• Company Founders: Create and sign Equity Agreements to establish initial ownership structure and voting rights
• Corporate Lawyers: Draft and review agreements to ensure compliance with Nigerian corporate law and CAC regulations
• Investors: Review and negotiate terms before providing capital, especially venture capitalists and angel investors
• Board Members: Oversee implementation and ensure adherence to agreement terms during company operations
• Company Secretary: Maintains records and ensures proper documentation of ownership changes
• Minority Shareholders: Rely on these agreements to protect their interests and voting rights

• Company Details: Gather CAC registration documents, shareholding structure, and current market valuation
• Shareholder Information: Collect legal names, contact details, and proposed ownership percentages of all parties
• Investment Terms: Document capital contributions, payment schedules, and share class preferences
• Voting Rights: Define decision-making thresholds and special voting privileges for key matters
• Exit Provisions: Specify share transfer rules, right of first refusal, and buy-out procedures
• Template Selection: Use our platform to generate a legally compliant agreement tailored to Nigerian law
• Final Review: Cross-check all details and ensure alignment with company objectives

• Party Identification: Full legal names, addresses, and registration details of all shareholders
• Share Details: Number, class, and value of shares allocated to each party
• Voting Rights: Clear stipulation of voting powers and decision-making thresholds
• Transfer Restrictions: Rules for selling or transferring shares, including right of first refusal
• Dividend Policy: Terms for profit distribution and reinvestment guidelines
• Dispute Resolution: Nigerian jurisdiction clause and arbitration procedures
• Exit Mechanisms: Buy-out provisions and valuation methods
• Governing Law: Explicit reference to Nigerian Companies and Allied Matters Act

People often confuse an Equity Agreement with a Simple Agreement for Future Equity (SAFE). While both deal with company ownership, they serve different purposes and are used at different stages of business development.

• Timing of Ownership: Equity Agreements establish immediate ownership rights and responsibilities, while SAFEs promise future equity based on specific trigger events
• Legal Structure: Equity Agreements create current shareholder relationships with voting rights and dividend claims, whereas SAFEs are investment instruments that convert to equity later
• Complexity: Equity Agreements require detailed terms about governance and shareholder rights; SAFEs are typically shorter and more straightforward
• Valuation Requirements: Equity Agreements need current company valuation, but SAFEs can be issued without determining present company worth
• Regulatory Compliance: Equity Agreements must meet strict CAC requirements for share issuance, while SAFEs face fewer immediate regulatory hurdles