Share Investment Agreement (Cash)

This agreement is a classic investment agreement where the existing shareholders in a company (who will also often be the original founders) enter into an agreement with an investor.

The investor invests money in the company in return for shares. This is an alternative method of funding for a company instead of seeking a bank or private loan.

What this Share Investment Agreement (Cash) records

This Share Investment Agreement (Cash) records the terms on which the investor will make their investment in the company and regulates the on-going relationship between the investor and the existing shareholders.

Short form assumptions and how this differs from a share sale

This is a short form agreement which assumes that all the existing shareholders are also directors of the business and that they will continue to hold shares in the company going forward.

This distinguishes it from a share sale and purchase agreement where all the shares in the company are being purchased and the original shareholders are exiting the business.

However, in issuing new shares to an investor, each of the existing shareholders will dilute their shareholding in the company. The resolutions set out in Schedule 6 deal with the procedural mechanics of this.

What the agreement covers

The agreement includes provisions dealing with conditions, the investment and completion process, an investor director, warranties, the business plan, matters requiring consent, transfer of shares, non-compete, confidentiality, notices, and governing law and jurisdiction.

It also includes schedules covering the existing shareholders, the investor, particulars of the company, articles of association, conditions, resolutions, warranties, and consents.

Share Investment Agreement (Cash) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.