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Equity Share Agreement Startup Template for United Arab Emirates

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Key Requirements PROMPT example:

Equity Share Agreement Startup

"I need an Equity Share Agreement Startup for my UAE-based fintech company to document a Series A investment of AED 5 million for 20% equity, with specific provisions for board representation and veto rights for the incoming venture capital investor."

Document background
The Equity Share Agreement Startup is a crucial document in the UAE startup ecosystem, designed to facilitate investment transactions while ensuring compliance with UAE commercial law and regulatory requirements. It is typically used when startups are seeking capital investment in exchange for equity shares, whether during seed rounds, Series A, or subsequent funding phases. The agreement incorporates essential elements required by UAE Federal Law No. 32 of 2021 and considers specific requirements for different free zones where applicable. This document serves as the foundational agreement governing the relationship between investors and the startup, covering aspects such as share valuation, transfer restrictions, investor rights, governance structures, and exit provisions. It's particularly important given the UAE's growing focus on startup development and recent regulatory changes allowing 100% foreign ownership in certain sectors.
Suggested Sections

1. Parties: Identification of all parties to the agreement including the Company, existing shareholders, and new investor(s)

2. Background: Context of the transaction, including company history, purpose of investment, and current shareholding structure

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Share Subscription and Purchase: Details of shares being issued/transferred, price, and payment terms

5. Completion: Conditions precedent, completion mechanics, and timing of the share transfer

6. Representations and Warranties: Statements of fact and assurances from the company and existing shareholders

7. Investor Rights: Specific rights granted to the investor including board representation, veto rights, and information rights

8. Transfer Restrictions: Limitations on share transfers including right of first refusal and tag-along rights

9. Confidentiality: Obligations regarding confidential information and announcements

10. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

11. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

Optional Sections

1. Anti-dilution Protection: Protection for investors against future down rounds, used when negotiated as part of investment terms

2. Drag Along Rights: Rights forcing minority shareholders to join in sale of company, included for larger investments or controlling stakes

3. Founder Commitments: Specific obligations for founders including non-compete and continued involvement, used when founders are key to business

4. Islamic Finance Compliance: Additional provisions ensuring Shariah compliance, used when required by investors or company policy

5. Employee Share Option Pool: Provisions for creating and managing an ESOP, included when company plans to implement employee share schemes

6. Intellectual Property Rights: Detailed IP provisions, particularly important for technology startups

7. Exit Rights: Specific provisions regarding IPO or trade sale, included for larger investments with clear exit expectations

Suggested Schedules

1. Schedule 1: Company Information: Detailed information about the company including registration details, licenses, and current shareholding

2. Schedule 2: Subscription Details: Detailed breakdown of share subscription including share class, numbers, and price

3. Schedule 3: Warranties: Comprehensive list of warranties given by the company and existing shareholders

4. Schedule 4: Reserved Matters: List of decisions requiring investor approval

5. Schedule 5: Completion Requirements: Checklist of documents and actions required for completion

6. Schedule 6: Deed of Adherence: Template deed for future shareholders to join the agreement

7. Appendix A: Shareholders' Resolution: Board and shareholder resolutions approving the share issuance

8. Appendix B: Share Certificate Form: Template for new share certificates to be issued

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions













































Clauses






























Relevant Industries

Technology

E-commerce

Financial Services

Healthcare

Education Technology

Clean Energy

Digital Media

Software Development

Biotechnology

Artificial Intelligence

Retail Innovation

Transportation

Real Estate Technology

Food Technology

Manufacturing Innovation

Relevant Teams

Legal

Finance

Corporate Governance

Executive Leadership

Investment

Compliance

Corporate Secretary Office

Business Development

Risk Management

Board of Directors

Relevant Roles

CEO

Chief Financial Officer

Startup Founder

Legal Counsel

Investment Manager

Venture Capital Partner

Corporate Lawyer

Company Secretary

Business Development Director

Finance Director

Compliance Officer

Board Member

Investment Analyst

Managing Partner

Corporate Governance Officer

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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