Define: Investors
In a shareholders' agreement, "Investors" refers to the specific individuals or entities named in the schedule of the document, plus anyone who later acquires their shares or subscribes for new shares and signs a Deed of Adherence agreeing to be bound as an Investor. The definition determines who holds investor rights and protections under the contract.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Investors Means in a Contract
The term "Investors" is a defined term used in shareholders' agreements and related corporate documents to identify the specific group of people or entities who hold shares under an investment arrangement and who are entitled to the rights, protections, and obligations attached to that status. Rather than referring generically to anyone who has put money into a company, the term is deliberately closed and precise: it captures only those named in a particular part of the agreement's schedule, together with any successors who properly step into their shoes.
This precision matters because shareholders' agreements typically grant Investors a bundle of rights that ordinary shareholders do not receive, such as information rights, consent rights over major decisions, pre-emption rights, or anti-dilution protections. Because these rights can be commercially significant, the contract must be unambiguous about exactly who qualifies as an Investor at any given time.
How Investors Is Defined or Measured
The definition typically works in two parts. First, it lists the original Investors by name and address, usually set out in a schedule to the agreement. This creates a fixed, identifiable starting group whose identity is not open to interpretation.
Second, the definition extends to future holders through a mechanism: anyone who receives a transfer of shares from an existing Investor, or who subscribes for new shares of the relevant class, becomes an Investor only once they sign a Deed of Adherence and are named in it as an Investor. This two-step test, being a transferee or subscriber, and formally adhering to the agreement, ensures that investor status cannot be acquired informally or by implication.
- Named parties: individuals or entities listed in the schedule at signing.
- Transferees: parties who acquire shares from an existing Investor.
- New subscribers: parties who subscribe for the relevant class of shares.
- Formal adherence: execution of a Deed of Adherence naming the party as an Investor.
Where Investors Appears in Agreements
The defined term appears throughout shareholders' agreements, investment agreements, and articles of association wherever investor-specific rights or obligations are described, such as clauses on board representation, veto rights, drag-along and tag-along provisions, and information rights. It also appears in ancillary documents connected to share movements, including a Relevant Circumstances
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