Shareholders Agreement: established business multiple investors
Shareholders agreement following the investment in an established business by multiple investors
When use a separate Shareholders Agreement?
Having a separate Shareholders Agreement is likely to be more suitable for a company:
- which already has non-management shareholders or investors, perhaps as a result of a previous investment round
- which anticipates having future funding rounds
About this Shareholders Agreement
This document is for a shareholders agreement following an investment by multiple investors in an established business. It acts as the shareholders agreement between the investors and the founders of the company going forward.
Rights of the investors are exercisable by a majority of the investors.
- director appointment rights:
- investor director: the right of the investors 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 majority and other shareholders
- information rights: rights of the investors 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
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