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Startup Shareholder Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Startup Shareholder Agreement

I need a Startup Shareholder Agreement for my Hong Kong technology company with three co-founders and two Silicon Valley venture capital investors, including provisions for future funding rounds and an IPO exit strategy by January 2025.

Document background
The Startup Shareholder Agreement is a foundational document used when establishing or formalizing a startup company structure in Hong Kong. It becomes necessary when a company has multiple shareholders, particularly during or after initial investment rounds. The agreement serves multiple crucial purposes: it defines shareholders' rights and obligations, establishes corporate governance mechanisms, protects minority interests, sets out procedures for share transfers, and addresses potential future scenarios such as additional funding rounds or company sale. Operating under Hong Kong law, it must comply with the Companies Ordinance (Cap. 622) and related regulations while addressing startup-specific concerns. This document is particularly important in the Hong Kong startup ecosystem, where international investors often participate and require clear governance structures and exit mechanisms.
Suggested Sections

1. Parties: Identification of all shareholders and the company

2. Background: Context of the agreement, including company formation and purpose

3. Definitions: Key terms used throughout the agreement

4. Share Capital and Shareholders: Details of share classes, numbers, and ownership percentages

5. Share Transfer Restrictions: Rules governing the transfer of shares, including right of first refusal

6. Management and Decision Making: Corporate governance structure, board composition, and voting rights

7. Reserved Matters: Decisions requiring special majority or unanimous consent

8. Shareholders' Meetings: Procedures for conducting shareholders' meetings and voting

9. Dividend Policy: Framework for declaring and distributing dividends

10. Information Rights: Shareholders' rights to company information and financial reports

11. Deadlock Resolution: Procedures for resolving fundamental disagreements

12. Confidentiality: Protection of company and shareholder confidential information

13. Term and Termination: Duration of agreement and circumstances for termination

14. General Provisions: Standard boilerplate clauses including notices, amendments, governing law

Optional Sections

1. Drag Along Rights: Rights forcing minority shareholders to join in sale of company, typically included for VC-backed startups

2. Tag Along Rights: Rights allowing minority shareholders to join in sale of majority stake, typically included for investor protection

3. Anti-dilution Protection: Provisions protecting investors from dilution in future funding rounds, included when preferred shares are issued

4. Employee Share Option Pool: Framework for employee share schemes, included when company plans to offer equity incentives

5. Founder Commitments: Specific obligations of founders including non-compete and time commitment, included when founders are active in business

6. Intellectual Property Rights: Assignment and protection of IP, especially important for technology startups

7. Exit Strategy: Provisions regarding IPO or trade sale, included when early exit is contemplated

Suggested Schedules

1. Schedule 1: Share Capital Table: Detailed breakdown of shareholding structure

2. Schedule 2: Deed of Adherence: Template for new shareholders to join the agreement

3. Schedule 3: Reserved Matters List: Comprehensive list of decisions requiring special approval

4. Schedule 4: Company Business Plan: Initial business plan and key milestones

5. Schedule 5: Share Valuation Methodology: Agreed method for valuing shares in transfer scenarios

6. Appendix A: Board Composition: Current and proposed board structure

7. Appendix B: Key Management Positions: List of key management roles and responsibilities

Authors

Alex Denne

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

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Relevant Industries

Technology

E-commerce

Financial Technology

Biotechnology

Software Development

Manufacturing

Retail

Healthcare

Education Technology

Clean Technology

Artificial Intelligence

Digital Media

Professional Services

Relevant Teams

Legal

Executive

Finance

Compliance

Corporate Governance

Board of Directors

Company Secretariat

Investment Relations

Relevant Roles

CEO

Founder

Co-Founder

Chief Legal Officer

General Counsel

Company Secretary

Chief Financial Officer

Board Director

Venture Capital Partner

Angel Investor

Corporate Lawyer

Investment Director

Compliance Officer

Chief Operating Officer

Executive Director

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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