• Founders’ Agreement
• Share Purchase Agreement
• Shareholders’ Agreement
• Term Sheet

1.Founders’ Agreement

A founders’ agreement outlines the various roles and responsibilities of the founding members of a company, the equity vested in them, the ownership of intellectual property created by them and their roles and responsibilities. It is a broad agreement covering various aspects of the endeavour that the founders are about to undertake, including the consequences of their departure or death.

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Advantages of a Founders’ Agreement

Clears the Air

Many matters tend to go un-discussed between co-founders. This agreement gives the early team members the opportunity to discuss these matters, clearing any doubts and allowing for a better relationship.

Defines Roles

This gives members the opportunity to clarify their role in the company and also gives every founding member a good understanding of what the other founding members do.

2.Share Purchase Agreement

A share purchase agreement (SPA) is an agreement between 2 parties in which the seller agrees to sell the stated number of shares to the buyer at a particular price. The aim of the document is to prove that the terms of the agreement were mutually agreed upon. Such an agreement specifies the consideration and the number of shares to be sold, the conditions precedent (the authorizations necessary, for example) and covenants by the parties. The shares will be allotted after this agreement is signed (and on the basis of this agreement).

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Document Drafting

The first draft will be shared with you in four days

Iterations

We do two rounds of iterations at no extra cost

Advantages of a Share Purchase Agreement

Due Diligence

An SPA is an essential business practice when a shareholder is being inducted. While many new businesses take a casual approach to such matters, the absence of such a document can have several undesirable consequences.

Protects Parties

Such a document gives both parties the opportunity to protect their interests before the shares are transferred. Being a comprehensive document, it covers every aspect of the transaction and is crucial for both parties to examine each clause covered in the document and understand its meaning.

3.Shareholders’ Agreement

A Shareholders’ Agreement is simply an agreement governing the relationship between the shareholders of a company. These include their rights and obligations, transfer of shares, how the company is going to be run and how important decisions are to be made.

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Document Drafting

The first draft will be shared with you in four days

Iterations

We do two rounds of iterations at no extra cost

Advantages of a Shareholders’ Agreement

Clarifies Power

A Shareholders’ Agreement clarifies all the powers of a shareholder and the rights you reserve as the issuer of such shares by defining the rights and liabilities of all. Moreover, it acts as a regulator of the relationship between small and large shareholders.

Makes Changes Easy

Shareholders’ Agreements are perfect for small and medium companies that don’t want to formally amend the constitution every time there is a small change.

4.Term Sheet

A term sheet is a critical document, particularly for an Indian businessman. Months into negotiation and contract drafting, you may find out that there is no agreement on the basics of the contract. A term sheet solves this problem by putting into place a framework for the final contract. The term sheet, therefore, reflects the broad consensus of the parties on the material terms and conditions, such as price, quantity, valuation, due diligence and pre-emption.

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Document Drafting

The first draft will be shared with you in four days

Iterations

We do two rounds of iterations at no extra cost

Advantages of a Term Sheet

Avoid Unnecessary Expenses

A term sheet can be used to iron out differences on the vital parts of any major business agreement prior to the drafting of the actual agreement, thereby preventing an unnecessary expenditure on a company’s resources.

Save Time

Rather than spend time re-drafting a contract that neither party is in agreement with, it makes sense to simply put in place a plan through a term sheet. While specifics of any clause would not be in this contract, it would contain the basics of how they would be arrived at.