Shareholders' Agreement (SHA)

What this is

A shareholders' agreement between the shareholders of a private company - founders, investors and others - setting out board composition, reserved matters, transfer restrictions, pre-emption, tag-along and drag-along, anti-dilution, information rights, non-compete and exit, so the company is governed as the parties agreed and the articles are amended to match. Our panel advocate drafts and reviews the agreement and delivers it signed on letterhead; stamping and the amendment of the articles are separate steps we explain.

What you get

A shareholders' agreement drafted, reviewed and signed by our panel advocate on letterhead, covering the parties and the company, shareholding and cap table, board composition and quorum, reserved matters, transfer restrictions including right of first refusal or offer, tag-along and drag-along, pre-emptive rights and anti-dilution, information and inspection rights, founder commitments and non-compete, deadlock, exit and liquidation preference, confidentiality, representations, termination and dispute resolution, with a schedule of the articles amendments needed to make it enforceable against the company. Delivered ready for execution, with a note on stamp duty and on the board and shareholder resolutions and MCA filings for the amended articles. Stamp duty and MCA fees are not included.

How it works

1. 1Upload the papersThe incorporation certificate, current cap table, existing articles, and the term sheet or investor's draft if any. We pre-fill the company and the shareholders.
2. 2Confirm the dealBoard seats, reserved matters, transfer rules, investor rights and exit terms.
3. 3Answer the advocate's questionsWhether an investor is driving the terms, whether founders have vesting, whether any shareholder is foreign, what the articles currently say, and what deadlocks worry you.
4. 4PayPay the fee.
5. 5Advocate drafts and signsOur panel advocate drafts the agreement and the articles amendment schedule and signs it on letterhead.
6. 6Agreement is deliveredYou receive the agreement for execution, with the stamping and MCA filing note.

What to have ready

• Certificate of incorporation, MoA and AoACurrent constitutional documents.
• Cap table or shareholding statementCurrent holdings of every shareholder.
• ID and PAN of every partyAadhaar and PAN of each person signing; incorporation documents if an entity.
• Term sheet or investor's draft (if you have it)If any.
• Existing shareholders', founders' or vesting agreements (if you have it)If any.
• ESOP plan, convertible notes or shareholder loans (if you have it)If any exist.
• Board resolution authorising the company to sign (if you have it)If the company is a party.

What this is based on

• Companies Act 2013 (2013)
• Specific Relief Act 1963 (1963)
• Contract Act 1872 (1872)
• SEBI LODR
• Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (2019)Source: https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11200