Shareholders Agreement And Share Subscription Agreement for Philippines

Shareholders Agreement And Share Subscription Agreement Template for Philippines

A comprehensive legal document governed by Philippine law that combines both a share subscription agreement and a shareholders agreement. It regulates the initial investment through share subscription while also establishing the ongoing relationship between shareholders, their rights, obligations, and the company's governance structure. The document ensures compliance with the Revised Corporation Code of the Philippines and the Securities Regulation Code, addressing matters such as share transfer restrictions, voting rights, board composition, dividend policies, and exit mechanisms. It provides essential protection for both majority and minority shareholders while facilitating effective corporate governance and decision-making processes.

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What is a Shareholders Agreement And Share Subscription Agreement?

The Shareholders Agreement And Share Subscription Agreement is a crucial document used in Philippine corporate transactions when new shareholders are investing in a company while simultaneously establishing the framework for ongoing shareholder relations. It combines the immediate need for documenting share subscription terms with the long-term requirements for managing shareholder relationships. This document is particularly relevant in scenarios involving private equity investments, venture capital funding, joint ventures, or strategic corporate investments. It must comply with Philippine corporate laws, including the Revised Corporation Code and Securities Regulation Code, especially regarding foreign ownership restrictions if applicable. The agreement typically covers share valuation, payment terms, completion mechanics, shareholder rights, corporate governance, share transfer restrictions, and exit provisions, making it essential for both initial investment and ongoing business operations.

What sections should be included in a Shareholders Agreement And Share Subscription Agreement?

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

2. Background: Recitals explaining the context of the agreement, company information, and purpose of the transaction

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

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

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

6. Warranties and Representations: Warranties given by the company and existing shareholders to the subscriber, and vice versa

7. Share Capital and Further Issues: Current and proposed share capital structure, and process for future share issues

8. Transfer of Shares: Restrictions on share transfers, pre-emptive rights, and transfer procedures

9. Corporate Governance: Board composition, appointment rights, voting requirements, and meeting procedures

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

11. Dividend Policy: Agreement on distribution of profits and dividend declarations

12. Information Rights: Shareholders' rights to company information and financial reports

13. Confidentiality: Obligations regarding confidential information and trade secrets

14. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee solicitation

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

16. General Provisions: Standard boilerplate clauses including notices, governing law, and dispute resolution

What sections are optional to include in a Shareholders Agreement And Share Subscription Agreement?

1. Tag-Along Rights: Optional clause giving minority shareholders the right to join in sale of shares by majority shareholders - typically included when there are significant minority shareholders

2. Drag-Along Rights: Optional clause allowing majority shareholders to force minority shareholders to join in sale of shares - typically included for exit flexibility

3. Anti-Dilution Protection: Optional protection for investors against future down-rounds - typically included for venture capital investments

4. Put and Call Options: Optional rights for forced sale or purchase of shares - included when parties want specific exit mechanisms

5. Deadlock Resolution: Optional mechanisms for resolving shareholder deadlocks - particularly important for 50/50 joint ventures

6. IPO Rights: Optional provisions regarding future public offerings - included when parties contemplate eventual listing

7. Foreign Ownership Compliance: Optional section detailing compliance with Philippine foreign ownership restrictions - required only if foreign shareholders are involved

What schedules should be included in a Shareholders Agreement And Share Subscription Agreement?

1. Schedule 1: Share Capital Structure: Details of current and post-completion shareholding structure

2. Schedule 2: Subscription Details: Detailed breakdown of share subscription including share numbers, prices, and payment terms

3. Schedule 3: Company Information: Key company details including registration information, directors, and officers

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

5. Schedule 5: Warranties: Detailed warranties given by the parties

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

7. Schedule 7: Deed of Adherence: Form of deed for new shareholders joining the agreement

8. Appendix A: Articles of Incorporation: Copy of the company's articles of incorporation

9. Appendix B: By-Laws: Copy of the company's by-laws

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

Jurisdiction

Philippines

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology and Startups

Manufacturing

Financial Services

Real Estate and Property Development

Retail and Consumer Goods

Healthcare and Pharmaceuticals

Energy and Utilities

Transportation and Logistics

Agriculture and Food Production

Professional Services

Media and Entertainment

Education

Mining and Natural Resources

Construction and Infrastructure

Telecommunications

Relevant Teams

Legal

Corporate Secretariat

Finance

Compliance

Corporate Development

Investment

Board of Directors

Executive Management

Shareholder Relations

Corporate Governance

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Secretary

General Counsel

Investment Director

Managing Director

Board Director

Corporate Lawyer

Investment Manager

Compliance Officer

Company Director

Legal Counsel

Finance Director

Business Development Director

Private Equity Manager

Venture Capital Manager

Corporate Development Manager

Shareholder Relations Manager

Industries
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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