Silent Shareholder Agreement Template for Philippines

The Silent Shareholder Agreement is a crucial document for Philippine businesses seeking to attract investment while maintaining operational control and investor confidentiality. This agreement type is particularly valuable when companies need additional capital but wish to keep investor involvement private, common in family businesses, startups, or situations where public knowledge of an investor might affect business relationships or market perception. The document comprehensively addresses investment terms, profit-sharing mechanisms, information rights, and exit provisions while ensuring compliance with Philippine corporate law, securities regulations, and tax requirements. It's especially relevant in today's business environment where private investment arrangements and confidential capital partnerships are increasingly common, providing a legally sound framework for silent investment while protecting both the company's management autonomy and the investor's financial interests.

1. Parties: Identification of the active shareholders/company and the silent shareholder, including complete details while noting confidentiality requirements

2. Background: Context of the agreement, including the company's business and the silent shareholder's intended investment role

3. Definitions: Key terms used throughout the agreement, including specific Philippine legal terminology

4. Investment Amount and Shareholding: Details of the silent shareholder's investment and corresponding ownership percentage

5. Confidentiality and Non-Disclosure: Provisions regarding the confidential nature of the silent shareholder's involvement

6. Profit Sharing and Dividend Rights: Terms for distribution of profits and payment of dividends to the silent shareholder

7. Information Rights: Silent shareholder's rights to receive financial information and company updates

8. Non-Participation in Management: Clear statement that the silent shareholder has no management rights or duties

9. Transfer Restrictions: Limitations on transferring shares and maintaining confidentiality in case of transfer

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

11. Exit Provisions: Mechanisms for the silent shareholder to exit the investment

12. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes