Share Subscription And Shareholders' Agreement

This agreement restricts itself only to the sale and purchase of shares where a company promises to sell a given number of shares to an investor at a certain price. You need it as it serves as an evidence of your title over the stock and save you a lot of legal hassle along with preventing any dispute in future.

This agreement becomes enforceable as soon as it is signed by all parties concerned and is printed on a Non-Judicial stamp paper which vary as per state law. Use this agreement if You are an investor interested in buying shares from a company. You represent a company which is interested in selling shares.

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Frequently Asked Questions

This agreement restricts itself only to the sale and purchase of shares where a company promises to sell a given number of shares to an investor at a certain price. You need it as it serves as an evidence of your title over the stock and save you a lot of legal hassle along with preventing any dispute in future.
Who needs this agreement and why?
This agreement becomes enforceable as soon as it is signed by all parties concerned and is printed on a Non-Judicial stamp paper which vary as per state law. Use this agreement if You are an investor interested in buying shares from a company. You represent a company which is interested in selling shares.
What is the use of Annexure?
The following are all the major clauses included in this agreement:
  1. Definitions and Interpretation-includes the meaning of various definitions used in this agreement.
  2. Share capital,investment and issuance of Investor Shares-this clause includes the that the Investors shall subscribe to the Investor Shares of the Company and that the individual shareholding of each Investor will vary depending on their individual contribution of the Investment Amount
  3. Conditions Precedent-This clause states that the obligation of the Investors to subscribe to the Investor Shares is conditional upon the fulfilment of certain conditions to the satisfaction of the Investors.
  4. Closing-this clause states the date on which the Closing of investment shall take place which shall be mutually agreed, between the Parties.
  5. Investor rights and Privileges-this clause enumerates the rights enjoyed by the promoters such as information and inspection rights, pre-emptive rights,right of first refusal and Tag-Along,liquidation preferance,Anti-Dilution rights.
  6. Corporate Governance-this clause includes the total strength of the board,constitution of the board,chairman,meetings of the board,commities of the board etc.
  7. Dispute Resolution-this clause atates that in the event of any dispute arising, the Parties shall meet to arrive at an amicable resolution thereof. And that this Agreement shall be governed by and construed in accordance with the laws of India.
  8. General Provisions- contains miscellaneous clauses including notice, assignment, severability, waiver, force majeure, grievance officer etc.
These are a few terms which might be useful to read about for a better understanding of this agreement:
  1. Investor-An investor is any person who commits capital with the expectation of financial returns.
  2. Encumbrances-means any security interest, pledge, mortgage, lien, charge, encumbrance, adverse claim, pre-emptive right, attachment, restrain and / or any restriction of any kind including without limitation, any restriction on the use, transfer, receipt of income or other attributes of ownership.
  3. Waiver- the voluntary surrender of any right or claim by a party.
  4. Severability-it means that If any provision of this Agreement is held invalid, void, or unenforceable under any applicable statute or rule of law, it shall to that extent be deemed omitted, and the balance of this Agreement shall be enforceable in accordance with its terms.
  5. ESOP-stands Employee Stock Option Plan of the Company.
  6. Force Majeure- An event that is a result of the elements of nature, as opposed to one caused by human behavior.
What are the legal jargons used in this agreement?
Kindly note that for making this agreement even more user friendly, we have provided an additional Annexure section in the end. There is 1 annexure section in this particular agreement which is filled according to the responses given by the user. In case any help is required from our side, if you are unable to fill up details of the appendix, you can drop us a query on [email protected] within 15 days of receiving this agreement.
How to use this agreement?
The following are all the major clauses included in this agreement:
  1. Definitions and Interpretation-includes the meaning of various definitions used in this agreement.
  2. Share capital,investment and issuance of Investor Shares-this clause includes the that the Investors shall subscribe to the Investor Shares of the Company and that the individual shareholding of each Investor will vary depending on their individual contribution of the Investment Amount
  3. Conditions Precedent-This clause states that the obligation of the Investors to subscribe to the Investor Shares is conditional upon the fulfilment of certain conditions to the satisfaction of the Investors.
  4. Closing-this clause states the date on which the Closing of investment shall take place which shall be mutually agreed, between the Parties.
  5. Investor rights and Privileges-this clause enumerates the rights enjoyed by the promoters such as information and inspection rights, pre-emptive rights,right of first refusal and Tag-Along,liquidation preferance,Anti-Dilution rights.
  6. Corporate Governance-this clause includes the total strength of the board,constitution of the board,chairman,meetings of the board,commities of the board etc.
  7. Dispute Resolution-this clause atates that in the event of any dispute arising, the Parties shall meet to arrive at an amicable resolution thereof. And that this Agreement shall be governed by and construed in accordance with the laws of India.
  8. General Provisions- contains miscellaneous clauses including notice, assignment, severability, waiver, force majeure, grievance officer etc.

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