The Startup Gig
Shareholder Subscription Agreement Services for Startups
Obtain expertly crafted Shareholders Agreement services to define the relationship between a company’s shareholders and the business, minimizing legal risks and averting litigation.
Overview Of Shareholders Agreement Services
Shareholder agreement services encompass the provision of legal support and documentation tailored to the needs of companies and their shareholders. These services are aimed at drafting, reviewing, and implementing shareholder agreements, which are crucial for defining the rights, obligations, and governance structures within a company.
The objective of a shareholders’ agreement is to provide equal protection to all shareholders and enable them to decide whether to become shareholders in the future. Such an agreement emphasizes the commitment of majority shareholders to safeguard minority shareholders from exploitation and to give them a voice when crucial decisions are made. This is why minority shareholders often place a higher value on shareholder agreements compared to majority shareholders.
Why choose The Startup Gig For Shareholders Agreement Services
We Are Honest Professionals Who Understand The Importance Of Knowing Our Business
Mentored 2000+ Startups
In the span of 7 years, we have mentored more than 2000+ startups for legal consultation. THE STARTUP GIG helps ambitious entrepreneurs and early-stage companies with best-in-class fundraising services to scale up their business.
We Help You Structure The Deal And Draft The Document Accordingly
Benefits of a Shareholders Agreement
There are mainly two benefits of Shareholders Agreement:
- It establishes authority.
A shareholders agreement in India clarifies a shareholder’s authority and standing, as well as the license held as the issuer of such shares, by describing the powers and risks for all parties involved. Furthermore, it acts as a gatekeeper in the interaction between small and large shareholders.
- Making changes is simple
A shareholders agreement facilitates the process of amending the company constitution, making it suitable for small and medium-sized businesses that prefer not to overhaul the entire constitution for minor changes.
Shareholders Agreement Include
sBefore finalising the shareholders agreement, ensure that all necessary provisions are included by reviewing the shareholders agreement.
1. Right of Shareholders
- The right to vote.
- The right to appoint directors and the company auditor.
- The right to call a general meeting.
- Right to inspect the company’s books and registers as well as its financial statements.
2. Regulations governing the transfer and sale of the company’s shares
A shareholders agreement must include certain rules to protect the shareholders’ interests in the transfer and sale of the company’s shares. Such rules would ensure that a sale or transfer occurs only after the parties involved have given their mutual consent.
3. The company’s financial requirements
When shareholders believe it will benefit the company, they can proceed to obtain the most viable source of funding. The procedure for obtaining such funds is outlined in the draught shareholders agreement.
4. Minimum quorum requirements
The shareholders agreement will specify the quorum requirements (the minimum number of members required to constitute a valid meeting).
5. Methods for Valuing the Company’s Shares
Given the market’s frequent fluctuations, proper valuation of company shares is critical to the company’s fortunes. In India, the valuation methods and approaches are precisely laid out in the shareholders agreement.
6. Operating Procedures for the Company
In India, the shareholders agreement would include guidelines, policies, and procedures to ensure the smooth operation of the company on a daily basis.
7. Liability of Shareholders
Shareholders have limited liability with the company and are not directly liable for its actions. The shareholders’ liabilities are clearly defined in the agreement.
8. Minority shareholder protection
The rights of minority company shareholders are outlined in the shareholders agreement, according to the provisions of the 2013 Companies Act. The agreement will safeguard minority shareholders in the event of mismanagement, oppression, or piggybacking (the sale of shares by the majority shareholders).
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Frequently Asked Questions for Shareholder Agreement
1. How is a Shareholders' Subscription Agreement different from just signing a cheque?
It’s more than a payment. This agreement formalizes the investor’s commitment, specifying share details, rights, obligations, and protecting both sides. It makes your fundraising transparent and legally secure.
2. Can this agreement affect control of my startup?
Yes. The agreement may include details about voting rights or special privileges tied to the shares issued, which could influence company control. That’s why it must be drafted carefully.
3. What risks am I avoiding by having this agreement?
It helps prevent disputes over share ownership, protects against misunderstandings, and safeguards your startup’s valuation and investor relationships.
4. What happens if the investor fails to pay?
The agreement usually contains provisions for defaults, including penalties or termination of the subscription, ensuring the company is protected from non-payment risks.
5. Does this agreement need to be notarized or filed anywhere?
Not always, but depending on your jurisdiction, it may need to be filed with the company registry. Having a legal professional ensures all compliance requirements are met.
6. Can this agreement include conditions for future investment rounds?
Yes. You can include clauses about rights of first refusal, anti-dilution provisions, or preemptive rights for investors in future rounds.
7. Who should review the agreement before signing?
Both the company and the investor should have legal counsel review the document to ensure clarity and fairness. At The Startup Gig, we handle this process end-to-end.
8. Can I have a subscription agreement for multiple investors in one round?
Absolutely. We can structure agreements that work for a single investor or multiple investors participating together, keeping terms clear for all parties.
9. How do I make sure the agreement aligns with my company’s growth strategy?
By including strategic provisions like exit conditions or shareholder rights, you ensure the agreement supports your long-term vision. That’s something we focus on while drafting.
10. How soon can The Startup Gig prepare this agreement for me?
We can typically deliver a draft within 5–7 business days, depending on complexity. Our goal is to keep your fundraising process smooth and timely.