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 a share sale transaction
- where confidential information about the target company will be disclosed to a potential buyer
- for a longer form NDA with strong legal protections for the seller and target company
What are the key features?
- 17 clauses over 9 pages
- definitions of Confidential Information and Proposed Transaction
- confidentiality obligations
- authorised recipients of Confidential Information
- circumstances permitting compulsory disclosure
- procedure for returning Confidential Information to the seller
- prohibition on the buyer poaching the target company’s employees
- contractual remedies for breach of the NDA, including contractual indemnity in favour of the seller and target company
- duration of agreement
What else do I need to know?
It’s quite common that some clauses of an NDA may be resisted by the receiving party. The guidance notes which accompany this document explain how provisions, such as the following, might be negotiated to reach mutual agreement.
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- non-solicitation covenants
- a contractual indemnity for breach of the confidentiality obligations
- the duration of the agreement
The guidance notes which accompany the document explain how these provisions might be negotiated to reach agreement.
What other docs are available?
For a shorter form of confidentiality agreement for a company sale transaction, see
£75.00 exc VAT
Updated by a lawyer on 12/09/2024
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