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Equity Ownership Agreement Template for New Zealand

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Key Requirements PROMPT example:

Equity Ownership Agreement

"I need an Equity Ownership Agreement for my New Zealand tech startup, establishing the initial shareholding structure between three co-founders with equal ownership (33.3% each), including provisions for future investment rounds and vesting schedules."

Document background
The Equity Ownership Agreement is a crucial document used in New Zealand business contexts when establishing or modifying company ownership structures. It's particularly vital during company formations, investment rounds, or when implementing significant changes to shareholding arrangements. This agreement, governed by New Zealand law, ensures compliance with the Companies Act 1993 and other relevant legislation while providing comprehensive coverage of shareholder rights, responsibilities, and relationships. The document typically includes detailed provisions for share transfers, voting rights, dividend distributions, board representation, and dispute resolution mechanisms. It's essential for protecting both majority and minority shareholder interests and establishing clear governance frameworks. The Equity Ownership Agreement is commonly used in various scenarios, from startup capital raises to corporate restructuring, and can be adapted to accommodate different company sizes and complexity levels.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including the company and all shareholders

2. Background: Context of the agreement, including company information and purpose of the equity arrangement

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

4. Share Ownership Details: Specification of share classes, numbers, and ownership percentages

5. Consideration: Details of payment or other consideration for the shares

6. Completion and Conditions Precedent: Requirements and processes for completing the share transfer/issue

7. Shareholders' Rights and Obligations: Core rights and obligations of shareholders, including voting rights and dividend entitlements

8. Transfer Restrictions: Limitations and procedures for transferring shares

9. Pre-emptive Rights: Process for existing shareholders to purchase shares before external sale

10. Board Representation: Rights and procedures for appointing directors

11. Management and Decision Making: Governance structure and decision-making processes

12. Confidentiality: Obligations regarding confidential information

13. Dispute Resolution: Procedures for resolving disputes between shareholders

14. Termination: Circumstances and procedures for terminating the agreement

15. General Provisions: Standard legal provisions including notices, amendments, and governing law

Optional Sections

1. Tag-Along Rights: Rights of minority shareholders to join in sale of majority stake

2. Drag-Along Rights: Rights of majority shareholders to force minorities to join in sale

3. Put and Call Options: Rights to force purchase/sale of shares under specific circumstances

4. Anti-dilution Provisions: Protections against dilution of shareholding in future share issues

5. Dividend Policy: Specific arrangements for dividend distributions

6. Share Vesting Provisions: For agreements involving employee shareholders or staged ownership

7. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee poaching

8. Information Rights: Special rights to company information for certain shareholders

9. Exit Strategy: Planned approach to future sale or IPO of the company

Suggested Schedules

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

2. Schedule 2: Deed of Accession: Template for new shareholders joining the agreement

3. Schedule 3: Company Constitution: Copy or reference to the company's constitution

4. Schedule 4: Reserved Matters: List of decisions requiring special majority or unanimous approval

5. Schedule 5: Completion Requirements: Detailed checklist of actions required for completion

6. Schedule 6: Warranties: Detailed warranties given by the parties

7. Appendix A: Share Certificate Templates: Templates for share certificates if physical certificates are used

8. Appendix B: Valuation Methodology: Agreed method for valuing shares for various purposes

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 Teams

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Relevant Roles

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