Investment and Shareholders Agreement: established business single investor
Combined investment and shareholders agreement for the investment in an established business by a single investor
Background
When use a combined investment and shareholders agreement?
A combined investment and shareholders agreement is likely to be suitable:
- for the first investment in a company by an investor
- where the company does not anticipate future investment rounds involving additional investors
About this Investment and Shareholders Agreement
This document is for the investment by a single investor in an established business carried on through a private limited company. It covers both the investment terms and acts as the shareholders agreement between the investor and the founders of the company going forward.
Document features
- subscription: the mechanism and terms for the subscription for shares by the investor
- conditions: conditions to the closing of the investment (if applicable)
- completion: completion of the investment, including the issue of shares to the investor and payment by the investor
- warranties: warranties from the company and, if agreed, the founder shareholders. As the investment is in an established business, the warranties are in relatively full-form to reflect the trading history of the company and its subsidiaries
- limitations on liability: legal limitations on the potential liability under the warranties of the persons who have given the warranties
- director appointment rights:
- investor director: the investor’s right to appoint a director
- other directors: the founder shareholder(s) rights 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: process for the transfer of shares, including:
- pre-emption rights on share transfers
- compulsory transfer events, including if a founder ceases to be employed by the company whether as a good or a bad leaver
- tag-along and drag-along rights
- reserved matters: a list of matters requiring the prior approval of the investor and other shareholders
- information rights: rights of the investor and other shareholders to information about the company and its finances
- restrictive covenants: restrictions on the founders in terms of competing with the company and soliciting customers, suppliers and employees of the company
Explanatory guidance
As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.
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