Fundraising Commission Agreement Template for Hong Kong

A Fundraising Commission Agreement is a specialised contract that governs the relationship between a company seeking to raise capital and a professional fundraiser or placement agent in Hong Kong. This document establishes the terms under which the fundraiser will seek investors, the commission structure for successful placements, and the compliance obligations required under Hong Kong's financial regulations.

When do you need this document?

You need a Fundraising Commission Agreement when your company is seeking external capital and plans to engage professional fundraisers or placement agents to identify and approach potential investors. This is particularly common for startup companies seeking venture capital, established businesses pursuing growth funding, investment funds raising capital from institutional investors, and companies preparing for initial public offerings. The agreement is also essential when working with licensed intermediaries who deal in securities, as Hong Kong's Securities and Futures Ordinance requires proper documentation of such arrangements. Additionally, you'll need this agreement if you're engaging multiple fundraisers simultaneously and need to clarify territorial or sector exclusivity arrangements.

Key legal considerations

Several critical legal elements must be carefully structured in your agreement. The commission structure should clearly define what constitutes a "successful fundraising" and specify payment triggers, percentages, and any minimum thresholds. Regulatory compliance clauses must address Securities and Futures Ordinance requirements, particularly if the fundraiser is a licensed entity or if the fundraising involves regulated securities. Anti-money laundering provisions should outline customer due diligence responsibilities and record-keeping obligations under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The scope of services must be precisely defined to avoid disputes over what activities fall within the fundraiser's mandate. Confidentiality and non-disclosure provisions protect sensitive business information shared during the fundraising process. Risk allocation clauses should address potential liability for regulatory breaches, misrepresentations, or failure to meet fundraising targets.

Legal requirements in Hong Kong

Hong Kong's regulatory framework imposes specific requirements that must be incorporated into your agreement. Under the Securities and Futures Ordinance, any person carrying on regulated activities such as dealing in securities must hold appropriate licences, and your agreement must verify and reference these licensing requirements. The Anti-Money Laundering and Counter-Terrorist Financing Ordinance requires proper customer due diligence procedures, which must be clearly allocated between parties in the agreement. Employment law considerations under the Employment Ordinance may apply if the relationship could be characterised as employment rather than independent contracting, so the agreement must clearly establish the independent contractor nature of the relationship. Contract formation must comply with Hong Kong common law principles, ensuring proper offer, acceptance, and consideration. Additionally, if the fundraiser will be approaching overseas investors, the agreement must consider cross-border regulatory implications and ensure compliance with both Hong Kong and foreign securities laws where applicable.