Share Investment Agreement Templates
Many companies, particularly new start-up businesses, often require some level of investment in order to enable them to grow faster or achieve certain objectives within a shorter time frame.
This subfolder of documents is dedicated to template documents that cover investment arrangements and contains two different types of investment agreement and various complementary documents.
Our investment agreements include the traditional cash for an equity (share) stake in a business as well as the more unusual “sweat equity” arrangement, where instead of making a cash investment, an investor provides services to the business in return for an eventual equity stake. The latter agreement may be of particular interest to a start-up business that does not yet have the resources to pay for a specific service that it needs, but can provide the “investor” with an equity stake in the business instead of cash payment.
The templates in this subfolder do not consider the tax or accounting implications of making an investment into a company. It is recommended that independent advice is sought.
Each Investment Agreement and the complementary documents are compliant with the Companies Act 2006.
Share Investment Agreement Templates is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.
Frequently Asked Questions
What should a share investment agreement cover for a small private company? +
The commercial spine: the amount invested and shares to be issued, any conditions before completion, warranties from the company about its position, completion mechanics including payment and allotment, and any ongoing rights the investor gets such as information or board attendance. Keep warranties proportionate to a private round. The templates here pair the agreement with the board minutes and shareholder resolutions that authorise the allotment, so the legal and commercial layers complete together.
How does a sweat equity deal work in practice and what should we nail down? +
The investor provides defined services instead of cash and earns an equity stake, usually once milestones are met. Nail down four things: exactly what services and to what standard, when the shares are earned and issued, what the stake is if the relationship ends early and who owns work product created along the way. Both sides should take tax advice, shares for services are generally taxable income for the recipient. The Shares for Services agreement here structures all four.
What approvals do we need in place before signing an investment agreement? +
Before signature, confirm the directors will have authority to allot the new shares and deal with existing shareholders' pre-emption rights, by waiver or disapplication where the investor is new. Board approval of the agreement itself should be minuted. Signing first and seeking approvals later leaves you contractually bound to an allotment you may not lawfully be able to make. The complementary resolutions and minutes in this sub-folder exist precisely to close that gap.
What actually happens at completion of the investment? +
In one sitting: the investor pays, the board resolves to allot, the register of members is written up, which is the moment the investor becomes a shareholder, the share certificate is issued and form SH01 with the updated statement of capital is filed within one month. Any agreed appointments or consents take effect per the agreement. Run it from a checklist so nothing waits on memory; the templates and minutes here follow that completion sequence.
