Founder Stock Purchase Agreement for Singapore

Founder Stock Purchase Agreement Template for Singapore

A Founder Stock Purchase Agreement under Singapore law is a legally binding document that formalizes the purchase of company shares by a founder. It outlines the terms and conditions of the share purchase, including the number of shares, purchase price, payment terms, and any applicable vesting conditions. The agreement ensures compliance with Singapore's Companies Act and Securities and Futures Act, while establishing clear ownership rights and obligations between the company and its founder(s).

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What is a Founder Stock Purchase Agreement?

The Founder Stock Purchase Agreement is a crucial document used when establishing or formalizing founder ownership in a Singapore company. It's typically executed during company formation or early-stage development when founders are acquiring their initial stake. The agreement details share allocation, purchase terms, vesting schedules if applicable, and various rights and restrictions attached to the shares. Under Singapore law, this document must comply with the Companies Act and related regulations, making it essential for properly documenting founder ownership and protecting both the company's and founders' interests.

What sections should be included in a Founder Stock Purchase Agreement?

1. Parties: Identifies the company and the founder(s) entering into the agreement

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase of Shares: Core terms of the share purchase including number, class, and price

5. Payment Terms: Details of how and when payment will be made

6. Representations and Warranties: Statements of fact by both parties

7. Closing Conditions: Requirements that must be met before closing

8. Governing Law: Specification of Singapore law as governing law

What sections are optional to include in a Founder Stock Purchase Agreement?

1. Vesting Provisions: Terms of share vesting schedule, used when shares are subject to vesting conditions

2. Right of First Refusal: Company's right to purchase shares before third-party sale, used when company wants transfer restrictions

3. Drag-Along Rights: Majority shareholders' right to force minority participation in sale, used when protecting future sale possibilities

4. Non-Competition: Restrictions on founder's competitive activities, used when protecting company interests

What schedules should be included in a Founder Stock Purchase Agreement?

1. Share Details Schedule: Detailed breakdown of shares being purchased

2. Capitalization Table: Complete ownership structure pre and post-transaction

3. Vesting Schedule: Detailed vesting terms and timeline if applicable

4. Form of Share Certificate: Template of share certificate to be issued

5. Required Corporate Approvals: Copies of board and shareholder resolutions

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

Singapore

Publisher

Genie AI

Cost

Free to use
Clauses
Industries

Companies Act (Cap. 50): Primary legislation governing corporate matters including share issuance and transfer requirements, directors' duties and obligations, share capital structure regulations, and corporate governance requirements.

Securities and Futures Act (Cap. 289): Regulates securities offerings, disclosure requirements, restrictions on share transfers, and provides exemptions for private companies.

Income Tax Act: Governs tax implications of share transfers, tax treatment of share-based compensation, and stamp duty considerations.

Employment Act: Relevant when founder is also an employee, covering employment-related obligations and vesting conditions if applicable.

Contract Law (Common Law): Foundational principles governing contract formation, consideration requirements, terms and conditions, breach and remedies.

Singapore Exchange (SGX) Rules: Relevant if future listing is contemplated, including compliance requirements for public listings.

MAS Guidelines: Regulatory guidelines from the Monetary Authority of Singapore affecting corporate governance and securities matters.

Company Constitution: Company's governing document that sets out the rules for company administration and shareholder rights.

Shareholders' Agreement: Existing agreements between shareholders that may affect or need to be considered in the stock purchase agreement.

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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