Shareholder Subscription
Agreement
Shareholder and Subscription Agreement is a critical document between the company and the shareholders.
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SHAREHOLDER SUBSCRIPTION AGREEMENT
A shareholder subscription agreement, is an arrangement between shareholders and the company, defining how a company should be operating and outlines shareholders' rights and obligations. The agreement also includes information on the management of the company and privileges and protection of shareholders rights.
How it works?
Share investment terms
Provide company details, share class, subscription price, investor rights, and board seat terms.
Agreement drafting
Our lawyer drafts the SHA with anti-dilution, tag-along, drag-along, and liquidation preference clauses.
Investor negotiation
Founders and investors negotiate terms with our lawyer ensuring balanced protection.
Execution & compliance
Final SHA executed — share allotment filed with MCA and all statutory compliances completed.
Contents of Shareholder Subscription Agreement
The following clauses form part of a well drafted SHA:-
- Type of security issued/purchased
- Conversation rate of convertible securities
- Veto rights
- Founder's lock-in
- Drag along
- Tag along
- Right of first refusal (ROFR)
- Right of first offer (ROFO)
- Reps & Warranties
- Exit rights
- Governing law and Dispute Resolution
Laws governing the Shareholder Subscription Agreement in India
The different laws which govern various aspects of Shareholder's Agreement in India are as follows:
- Companies Act, 2013 and various rules framed thereunder
- The Indian Contract Act, 1872
- Foreign Exchange Management Act, 1999
- Consolidated FDI Policy, 2020
- RBI Policies
- Competition Act, 2002
- SEBI Guidelines (in case of listed company)
Why Legitax
- Senior Corporate Expert Lawyers: We will get your document drafted/reviewed by Senior Expert Corporate lawyers. You can track the progress of your document on our platform at all times.
- 4.5 Customer Score: Clients are delighted with our service! They have consistently rated us high because of our focus on delivering quality output and providing regular updates.
- Responsible Delivery: Our team of experienced business advisors are just a phone call away. Our team will ensure that your interaction with the expert lawyer is smooth and seamless and the document draft is delivered to you within the committed timeline.
Deliverables
Our standard deliverables for every document drafting includes:
- 60 Minutes of Talk-Time with the Lawyer for drafting/reviewing the Agreement
- First draft of the documents will be delivered to you within a maximum of 2 working days
- Post-delivery of the first draft – Iterations in the master Document to incorporate your suggestions/changes
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Bhopal, Madhya Pradesh
I've been using the Legitax app and it's really made dealing with legal stuff easier. It's great how I can just open the app and quickly find a legal expert to talk to, no matter what time it is. Every time I've had a question, big or small, I've gotten easy-to-understand answers from their experts. The app is super easy to use too, which is a big plus for me. I feel more confident handling legal things now. Legitax has been a big help!
Vijay Kanoor
Bengalore, Karnataka
The Legal advice I get is straightforward and easy to understand, which is important for me. Using Legitax has taken away a lot of stress when it comes to legal matters. I definitely recommend it to anyone looking for quick and reliable legal help.
Krishnamoorthy B
Chennai, Tamil Nadu
The advocate I connected with on Legitax was incredibly helpful, clearing up many doubts I had. They offered solutions and insights into issues that were affecting my family and me. I've had such a positive experience that I wouldn't hesitate to recommend Legitax to my friends.
Bhavesh Jain
Jaipur, Rajasthan
I was really impressed with the quality of legal advice I received. The lawyer was patient, knowledgeable, and took the time to explain everything in detail. It felt like having a personal legal advisor at my fingertips.
Lata Sharma
Amritsar, Punjab
Very convenient service. I needed urgent legal advice regarding a property dispute and was connected with a qualified lawyer within minutes. The consultation was thorough and the advice was practical and actionable.
Prakesh Ranjan
Patna, Bihar
Excellent platform for legal consultations. The process is seamless and the lawyers are very professional. I got my documents reviewed quickly and the feedback was comprehensive. Highly recommended for anyone needing legal assistance.
Preety Singh
Lucknow, Uttar Pradesh
Legitax made the entire process of getting legal help so much simpler. From consultation to document drafting, everything was handled professionally. The pricing is transparent and reasonable.
Arvind Pratap
Bhopal, Madhya Pradesh
Frequently asked questions
A Shareholder's Agreement (SHA) is an agreement that governs the rights and obligations of the shareholders of the company inter se. All your important rights in a company, such as type of securities, conversion rate of convertible securities, veto rights, anti-dilution rights, right of first refusal (ROFR), right of first offer (ROFO), drag along rights, tag along rights, other exit rights, etc. are all mentioned in the SHA.
Whenever you are entering into any investment transaction where you are purchasing the shares of a company (either through buying shares through existing shareholders or subscribing to new shares), you should enter into an agreement called SHA. In order to give effect to the terms of SHA, amendment to the Articles of Association (AoA) post investment, is pertinent.
A Shareholders Agreement (SHA) is an agreement that governs the relationship between the shareholders inter se. It enumerated the important rights and obligations of the shareholders. A Share Subscription Agreement (SSA) is an agreement between a new investor and the company by which the company issues fresh securities to the investor. A Share Purchase Agreement (SPA) is an agreement that is entered into between a new investor and an existing (or exiting) investor. By the virtue of SPA, the existing investor transfers the whole or a part of its shareholding in favour of the new investor. In contrast therefore, in an SSA, new securities are being issued to the investor and in case of SPA, an existing investor is transferring his shareholdings to the new investor. The company is just a passive party in case of SPA. However, in SSA, the company is the active party. A SHA, on the other hand, is entered into either case, i.e. whether new security is being issued or the security is being transferred.