Deed of Adherence: share issue

Deed of Adherence: share issue

Deed of Adherence to a Shareholders Agreement by a subscriber for shares in the company

Background

How does a new shareholder become bound by a Shareholders Agreement?

On the allotment of new shares in a company, the new shareholder may be required to sign up to the existing Shareholders Agreement of the company.  The requirement to enter into a Deed of Adherence may be found either in the company’s Articles of Association or in the Shareholders Agreement.

This is done by the subscriber executing a Deed of Adherence to the Shareholders Agreement.  The same process may also apply where a new shareholder has received shares by way of a share transfer.

About this Deed of Adherence

This Deed of Adherence is for a new shareholder who has subscribed for shares in the company to agree to become bound by the existing Shareholders Agreement of the company.  It is in the form of a Deed between the new shareholder and the company.  

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