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Share Subscription And Shareholders Agreement

Share Subscription And Shareholders Agreement Template for Canada

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Key Requirements PROMPT example:

Share Subscription And Shareholders Agreement

"Need a Share Subscription and Shareholders Agreement for our Toronto-based technology startup, where we're issuing Series A preferred shares to three venture capital investors in March 2025, with specific focus on anti-dilution protection and board representation rights."

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Document background
The Share Subscription And Shareholders Agreement is a crucial document used when a company is issuing new shares to investors while simultaneously establishing the framework for shareholder relationships. It's particularly relevant in private equity investments, venture capital funding rounds, or when bringing in strategic investors in Canada. The agreement serves dual purposes: first, it documents the terms of the share subscription, including the number and price of shares being issued; second, it establishes the ongoing rights and obligations of all shareholders, including voting rights, board representation, and share transfer restrictions. This document must comply with Canadian federal legislation such as the Canada Business Corporations Act, as well as relevant provincial securities laws. It's commonly used in growth-stage companies, family businesses seeking external investment, and corporate restructuring situations.
Suggested Sections

1. Parties: Identification of the Company, existing shareholders, and new subscribers

2. Background: Context of the transaction, current shareholding structure, and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Share Subscription: Details of share subscription including number of shares, price, and payment terms

5. Completion: Conditions precedent, completion obligations, and timing of the share subscription

6. Warranties and Representations: Warranties by the company and existing shareholders regarding the business and shares

7. Management and Corporate Governance: Board composition, appointment rights, and decision-making processes

8. Shareholder Rights and Obligations: Voting rights, dividend rights, and general obligations of shareholders

9. Share Transfer Restrictions: Limitations on transfer of shares and pre-emptive rights

10. Reserved Matters: Decisions requiring special majority or unanimous shareholder approval

11. Confidentiality: Obligations regarding confidential information and trade secrets

12. Term and Termination: Duration of the agreement and circumstances for termination

13. General Provisions: Standard boilerplate clauses 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. Anti-Dilution Protection: Protection for investors against future share issuances at lower valuations

4. Share Vesting Provisions: For agreements involving founder or employee shareholders

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

6. Non-Compete and Non-Solicitation: Restrictions on competitive activities and employee solicitation

7. Deadlock Resolution: Mechanisms for resolving shareholder or board deadlocks

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

9. ROFR on New Issues: Right of first refusal on new share issuances

10. Dividend Policy: Specific agreements on dividend distributions

Suggested Schedules

1. Schedule 1 - Share Capital Table: Current and post-completion shareholding structure

2. Schedule 2 - Subscription Details: Detailed terms of share subscription including price and payment terms

3. Schedule 3 - Company Information: Key corporate details including directors, registered office, etc.

4. Schedule 4 - Reserved Matters List: Comprehensive list of matters requiring special approval

5. Schedule 5 - Warranties: Detailed warranties given by the company and existing shareholders

6. Schedule 6 - Board Procedures: Detailed procedures for board meetings and decisions

7. Schedule 7 - Deed of Adherence: Form for new shareholders to join the agreement

8. Schedule 8 - Business Plan: Current business plan and financial projections

9. Schedule 9 - Completion Requirements: Detailed list of completion deliverables and requirements

Authors

Alex Denne

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Affiliate
Agreement
Annual Budget
Articles of Association
Board
Business
Business Day
Business Plan
By-laws
Change of Control
Completion
Completion Date
Confidential Information
Control
Deed of Adherence
Director
Drag-Along Notice
Drag-Along Right
Encumbrance
Event of Default
Exercise Notice
Exercise Period
Exit Event
Fair Market Value
Financial Year
Founding Shareholders
Group
Initial Public Offering
Intellectual Property Rights
Investors
Issue Price
Material Adverse Change
New Securities
Ordinary Course of Business
Ordinary Shares
Parties
Permitted Transferee
Pre-emption Notice
Pre-emption Rights
Preference Shares
Qualified IPO
Reserved Matters
ROFR Notice
Securities
Share Capital
Shareholder Loan
Shareholders
Shares
Subscription Price
Subscription Shares
Tag-Along Notice
Tag-Along Right
Transfer
Valuation
Warranties
Clauses
Interpretation
Definitions
Share Subscription
Payment Terms
Completion Conditions
Warranties and Representations
Board Composition
Board Meetings
Shareholder Meetings
Reserved Matters
Information Rights
Pre-emptive Rights
Share Transfer Restrictions
Tag-Along Rights
Drag-Along Rights
Put and Call Options
Anti-dilution Protection
Dividend Rights
Exit Provisions
Non-Competition
Non-Solicitation
Confidentiality
Intellectual Property
Default
Deadlock Resolution
Termination
Notices
Assignment
Amendment
Severability
Entire Agreement
Governing Law
Dispute Resolution
Force Majeure
Costs and Expenses
Waiver
Further Assurance
Counterparts
Relevant Industries

Technology

Manufacturing

Financial Services

Healthcare

Real Estate

Energy

Consumer Goods

Professional Services

Media and Entertainment

Biotechnology

Clean Technology

E-commerce

Software

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Board of Directors

Compliance

Corporate Secretariat

Investment

Mergers & Acquisitions

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

General Counsel

Company Secretary

Investment Director

Managing Director

Board Director

Chief Legal Officer

Corporate Development Manager

Venture Capital Partner

Private Equity Manager

Investment Banker

Corporate Finance Manager

Compliance Officer

Industries
Canada Business Corporations Act (CBCA): Federal legislation governing the incorporation and operation of businesses in Canada, including shareholder rights, corporate governance requirements, and share issuance procedures
Provincial Securities Acts: Provincial legislation regulating securities trading, including private placements and share offerings, with requirements for disclosure and registration
Income Tax Act: Federal legislation governing tax implications of share issuance, transfers, and dividend distributions
Provincial Business Corporations Acts: Provincial legislation governing corporate matters for provincially incorporated companies, including shareholder rights and corporate governance
Competition Act: Federal legislation governing merger review and competition issues that may arise from substantial share acquisitions
Personal Information Protection and Electronic Documents Act (PIPEDA): Federal privacy legislation governing the collection, use, and disclosure of personal information in commercial activities
Investment Canada Act: Federal legislation governing foreign investment in Canadian businesses, including share acquisitions by non-Canadians
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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