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Equity Share Agreement Startup for Singapore

Equity Share Agreement Startup Template for Singapore

An Equity Share Agreement for startups in Singapore is a legally binding document that governs the issuance of company shares to investors. Governed by Singapore law, particularly the Companies Act and Securities and Futures Act, this agreement outlines the terms of share subscription, shareholder rights, and obligations of all parties involved. It includes specific provisions for startup considerations such as future funding rounds, exit rights, and corporate governance structures.

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Equity Share Agreement Startup

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What is a Equity Share Agreement Startup?

The Equity Share Agreement Startup is a crucial document for Singapore-based startups seeking to formalize investment relationships through share issuance. This agreement is typically used when companies are raising capital through equity financing, whether in seed rounds, Series A, or subsequent funding rounds. It complies with Singapore's robust legal framework, including the Companies Act and Securities and Futures Act, and includes essential elements such as share pricing, investor rights, anti-dilution provisions, and governance mechanisms. The document serves as the foundation for the relationship between the startup and its investors, providing clarity and protection for all parties involved.

What sections should be included in a Equity Share Agreement Startup?

1. Parties: Identification of all parties involved in the agreement

2. Background: Context of the agreement and company information

3. Definitions: Key terms used throughout the agreement

4. Share Subscription Details: Number, class, and price of shares being issued

5. Payment Terms: Terms and method of payment for shares

6. Representations and Warranties: Statements of fact by both parties

7. Closing Conditions: Conditions that must be met before share issuance

8. Governing Law: Jurisdiction and applicable law

What sections are optional to include in a Equity Share Agreement Startup?

1. Anti-Dilution Rights: Protection against future dilution of shareholding - include when investors require protection against future down rounds

2. Tag-Along Rights: Right to join in sale of shares by other shareholders - include when minority shareholders need exit protection

3. Drag-Along Rights: Ability to force minority shareholders to join in sale - include when majority shareholders want exit flexibility

4. Board Appointment Rights: Rights to appoint directors - include when investors want board representation

What schedules should be included in a Equity Share Agreement Startup?

1. Cap Table: Current and post-investment shareholding structure

2. Company Information: Details of company registration, directors, and existing shareholders

3. Share Certificate Template: Format of share certificates to be issued

4. Disclosure Schedule: Exceptions to representations and warranties

5. Shareholders' Rights: Detailed description of rights attached to shares

Authors

Alex Denne

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

Jurisdiction

Singapore

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions

































Clauses































Industries

Companies Act (Cap. 50): Primary legislation governing company formation, share issuance, shareholders' rights, classes of shares, share transfer procedures, directors' duties and corporate governance requirements in Singapore

Securities and Futures Act (Cap. 289): Regulates securities offerings, disclosure requirements, share transfer restrictions, and private placement requirements for Singapore companies

Singapore Code on Take-overs and Mergers: Framework governing mergers and acquisitions, particularly focusing on minority shareholder protection and takeover procedures

Income Tax Act: Legislative framework covering tax implications of share issuance, capital gains treatment, and share-based compensation rules in Singapore

Singapore Exchange (SGX) Rules: Regulatory requirements for future IPO considerations and potential listing compliance requirements

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore affecting corporate governance and securities matters

Employment Act: Legislation relevant to employee share schemes and equity-based compensation arrangements

Competition Act: Legislation governing fair competition and market conduct that may affect share agreements and corporate structures

Personal Data Protection Act (PDPA): Framework for data protection requirements that must be considered in corporate documentation and shareholder information handling

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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