Bengaluru | 23 Oct, 2016 (2 years, 6 months ago)

Contracts and Legal Documentation

Shareholding agreements

We are interested in "co-founders agreement, shareholding agreements" for our company to make it a 50-50 shareholding/share certificates between the two co-founders. Please let us know the pricing and required documents for the same. Can you please guide us about the process, pricing and documents for the same. Also, does a shareholding agreement need to be signed on a stamp paper?
Answers
28 Oct, 2016 | 14:00

Before you venture in the drafting of the agreements, there are certain minor differences between a Founders Agreement and a Shareholders Agreement. Although the effect of both the agreements is primarily to govern the relationship between the parties (which in this case would be you and your co-founder), it is essentially the stage at which you wish to engage into the agreement that decides which agreement is more suitable. If you are in the early stages of your functioning and have not incorporated yourself as a company, a Founders Agreement is recommended since such an agreement can govern a variety of aspects including the manner of delineating responsibilities between the two co-founders, which is crucial since it significantly reduces any scope of misunderstanding between the two co-founders. A Founders Agreement, thus, captures all the understanding between the co-founders and crystallizes it in the form of a written document which is binding on both the parties. On the other hand, a shareholders agreement is a bit more technical and generally arises post incorporation of a company where the co-founders are shareholders. Various aspects of the shareholders agreement may, in fact be similar to a Founders Agreement. Aside from the charter documents (the MoA and the AoA), the content of either of the agreements would primarily be driven by the discussions between you and your co-founder.
You may contact me for any additional input.


26 Oct, 2016 | 23:38

The nature and details of the shareholders agreement would depend upon the constitutional documents of the Company i.e. the MOA and AOA. Furthermore, the details of the share documents along with the details of the agreement sought to be entered into between the shareholders would also be required. A comprehensive list of the process and the various documents required can only be advised once the complete facts are known. At this stage, the MOA and AOA would suffice for this purpose. Generally, no stamp duty will be payable on this agreement if it only evidences that both founders have an equal equity. Whether finally any duty is payable or not will depend upon the terms agreed in the agreement.


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