Investment and Shareholders Agreement: start-up business multiple investors
Combined investment and shareholders agreement for the investment by multiple investors in a start-up private limited company. The agreement covers the investment transaction and also acts as the shareholders agreement between the investors and the founders of the company.
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When do I use this document?
- for an investment by multiple investors in a start up business
- as a combined subscription and shareholders agreement
- for short form warranties from the company and founders, reflecting the company’s start-up status
- in conjunction with new Articles of Association – for Paper Rock’s accompanying Articles of Association, see Articles of Association – start up business multiple investors
- for investment in a private limited company incorporated in England and Wales
What are the key features?
- full form investment/subscription and shareholders agreement (ISHA)
- 28 clauses and 5 schedules over 36 pages
- subscription: mechanism and terms for the subscription for shares by the investors
- completion: completion of the investment, including the issue of shares to the investors and payment by the investors
- warranties: warranties from the company and each founder
- limitations on liability: limitations on potential liability under the warranties of the company and the founders
- investor rights: exercisable by a majority of the investors
- investor director: investors’ entitlement to appoint a director
- board proceedings: how proceedings of the board will be conducted
- future share issues: pre-emption rights on the issue of new shares
- share transfers: rules governing the transfer of shares, including:
- pre-emption rights on share transfers
- compulsory transfer events, including founder good and bad leaver clauses
- tag-along and drag-along rights
- reserved matters: matters requiring prior approval of the investor majority
- information rights: investors’ rights to information about the company and its finances
- restrictive covenants: restrictions on the founders from competing with the company and soliciting the company’s customers, suppliers and employees
What other documents are available?
For separate documents consisting of a Subscription Agreement and Shareholders Agreement for investment by multiple investors in a start-up business, see
- Subscription Agreement – start up business multiple investors
- Shareholders Agreement – start up business multiple investors
For a combined Investment & Shareholders Agreement for a start-up business with a single investor, see
For combined Investment & Shareholders Agreements for an established business, see
When do I use this document?
- for an indemnity clause to be included in a contract
- for a contract governed by English law
What are the key features?
- alternative forms of indemnity wording:
- indemnity from one party in favour of the other party
- mutual indemnity from both parties in favour of the other
- indemnity for breach of the underlying contract
- indemnity for potential loss arising from a third party claim
- wording for conduct of third party claims
What else do I need to know?
An indemnity is a contractual undertaking given by one party (the indemnifier) in favour of another party (the indemnified party or beneficiary) under which the indemnifier agrees to pay to the indemnified party the amount of any loss or damage which the indemnified party suffers as a consequence of a specified event.
The specified event might be:
- the breach of contract by the indemnifier
- liability of the indemnified party to a third party in relation to a specified event or circumstance
- a claim by a third party for loss or damage caused by the indemnifier’s breach of contract
Unlike other contractual obligations (and depending on the wording of the indemnity), an indemnity is not subject to legal rules and limitations regarding to the foreseeability of loss or the remoteness of damages which can be recovered by the beneficiary. In addition, the beneficiary is not legally obliged to mitigate its loss.
As a result and in exchange for agreeing to give the indemnity, the indemnifier may require that the beneficiary takes certain actions in relation to a claim or event which might give rise to a claim under the indemnity being made. These actions include:
- the notification of a claim from a third party in relation to the indemnified obligation
- an obligation on the indemnified party to take action required by the indemnifier to defend a third party claim
- allowing the indemnifier to take legal action in the name of the indemnifier to defend the third party claim
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Updated by a lawyer on 12/09/2024
- Updated By a lawyer on
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