Investor Agreement India



6. It has been agreed, by mutual agreement, that the undertaking may no longer dilute its own funds or use financing from another person or undertake to allocate shares to another person without XYZ`s agreement. It has also been agreed that ABC Group will not sell all the shares allocated to them without the agreement of XYZ Group until there is an IPO or a second round of mutually agreed financing. If a second round of funding is required, this is done by mutual agreement between the parties and an initial public offering (IPO) is expected and shares are issued to the public. The parties agreed that there would be a proportionate dilution of actions for all future funding rounds, as mutually agreed. Any agreement on this matter can be verified by a specialized lawyer before signing and have a legal opinion in front of hand, including the need to register the deed. Most investors will apply by default for a stake in a company. Depending on the amount, this can range from 1% to a majority stake of 51% or more, but it depends entirely on the total value of the invested company. 2. In India, digitization is still in its preliminary phase, for which it will be advised by you to have the agreement in question executed and registered in writing before the Registrar. 2) It is not necessary to register an investment contract You can conclude an agreement with all the conditions of your activity if you take care of your interests and needs. There is no need to register this agreement, but for security reasons, you can be minimalizing stamp duty on the basis of this amount A recent judgment of the Bombay High Court has allowed investors who wish to exercise their contractual rights to get the clarity they sorely need. In Edelweiss Financial Services Limited Vs Percept Finserve Private Limited And Ors.

(Application for Arbitration No. 220 of 2014), the Tribunal upheld the validity of the edelweiss secured put option under the Share Purchase Agreement concluded in December 2007 between Edelweiss and Percept (“SPA”). Under the Put option, Edelweiss had the right: (i) to resell the shares in Percept at a price that would give Edelweiss an internal return (IRR) of 10% (10%). or (ii) continue to hold such shares subject to certain obligations of Percept in the event of a breach of G.S.O. Section 16 of the SCRA, combined with the Circular of 1 March 2000 of the Securities and Exchange Board of India, prohibits “futures contracts”, i.e. contracts for which the supply of shares and the payment of shares are not at the same time. Percept argued that in the future, share repurchase, as provided for in the SPA, constitutes a derivative which, while not covered by Section 18-A of the SCRA, is prohibited, given that Section 18-A explicitly states that derivative contracts are only valid and legal if they are traded on a recognized exchange. Also, proving that you are aware of these kinds of things will create more confidence in yourself as an investor or startup entrepreneur during negotiations. Decisions focused on the protection of investors` rights therefore always involve a reflection on the distinction between the transferability of shares in private and public companies. This is due to the applicability of an important law called the Securities Contract (Regulation) Act, 1956 (“SCRA”). There has been some controversy over whether the provisions of the SCRA apply to private companies, but a number of cases, the best known, Dahiben Umedbhai Patel And Ors.

Vs Norman James Hamilton And Ors (1983 (85)BOMLR275) held that the provisions of the SCRA do not include private undertakings, since the securities of a private company do not have the character of “liquidity” and are not “negotiable securities” in the definition of “securities” in Section 2(h)(i) of the SCRA. . . .