Termsheet & Shareholders' Agreement (SHA)
Termsheet:
A Termsheet is a preliminary, non-binding agreement outlining the terms and conditions of a potential investment. It serves as a blueprint for negotiations between investors and companies seeking funding. Key elements typically included in a Termsheet are:
- Valuation and Investment Amount: Specifies the valuation of the company and the amount of investment proposed.
- Investment Structure: Outlines whether the investment will be in the form of equity, debt, convertible notes, etc.
- Ownership Stake: Defines the percentage of ownership or equity stake the investor will receive.
- Rights and Obligations: Details the rights and obligations of both parties, including any special provisions such as board seats or veto rights.
- Conditions Precedent: Lists conditions that must be met before the investment deal can be finalized.
- Confidentiality: Ensures the confidentiality of the negotiations and terms discussed.
Shareholders' Agreement (SHA):
A Shareholders' Agreement is a legally binding contract between the shareholders of a company. It regulates the rights and obligations of shareholders, protects their interests, and ensures smooth governance and management of the company. Key components typically found in an SHA are:
- Rights and Duties: Specifies the rights and duties of shareholders, including voting rights, dividend entitlements, and responsibilities towards the company.
- Management: Defines the structure of management, decision-making processes, and the role of shareholders in major company decisions.
- Transfer of Shares: Sets out conditions and restrictions on the transfer of shares to maintain control and stability within the company.
- Dispute Resolution: Establishes procedures for resolving disputes among shareholders, such as mediation or arbitration.
- Exit Strategies: Addresses procedures and terms for selling shares, including options for buyouts or selling to third parties.
How Accto Can Help:
1. Drafting Termsheet and SHA:
Accto offers expert drafting services for Termsheets and Shareholders' Agreements tailored to your specific business needs. Our team of legal professionals ensures that all essential terms are clearly articulated and legally enforceable.
2. Customization and Legal Compliance:
We understand that every business is unique. Accto customizes Termsheets and SHAs to reflect your company’s objectives, ensuring legal compliance and protecting your interests.
3. Negotiation Support:
Negotiating investment terms can be complex. Accto provides valuable support throughout the negotiation process, helping you achieve favorable terms while maintaining a balanced relationship with investors.
4. Review and Amendments:
Our services extend to reviewing existing Termsheets and SHAs, identifying potential risks, and recommending amendments to safeguard your business interests.
5. Legal Guidance and Expertise:
With Accto, you gain access to legal guidance from experienced professionals who specialize in corporate law and governance. We ensure that your Termsheets and SHAs are comprehensive, compliant, and aligned with industry best practices.
6. Continuous Support:
Beyond drafting and negotiation, Accto offers ongoing support to address any changes in your business environment or regulatory requirements, ensuring that your legal documents remain relevant and effective.
Why Choose Accto?
Accto stands out as your trusted partner in legal and financial compliance. We combine expertise with a client-centric approach to deliver tailored solutions that empower your business growth and protect your interests.
FAQ on Termsheet & SHA
A Termsheet is a preliminary agreement outlining key terms and conditions of a potential investment, serving as a basis for negotiations between investors and companies.
Essential elements include valuation, investment amount, investment structure (equity, debt, etc.), ownership stake, rights and obligations, and conditions precedent.
A Shareholders' Agreement is a legally binding contract among shareholders of a company, regulating their rights, duties, and relationships, ensuring smooth governance.
It covers rights and duties of shareholders, management structure, share transfer restrictions, dispute resolution mechanisms, and exit strategies.
Termsheets clarify expectations, protect interests, and set the framework for investment negotiations, ensuring alignment between parties before formal agreements.
It is advisable to draft an SHA early in a company's lifecycle, preferably when multiple shareholders are involved, to establish governance and protect shareholder rights.
Accto provides expert drafting services tailored to your business needs, ensuring clarity, legal compliance, and protection of your interests throughout the negotiation process.
Consider factors like valuation, investor expectations, rights and responsibilities, exit options, and how these terms impact your business's future growth and flexibility.
Yes, Accto offers review services to identify potential risks, ensure legal compliance, and recommend amendments to strengthen your position and protect your interests.
You can get started by contacting Accto for a consultation. Our team will assess your needs, discuss your objectives, and tailor our services to support your business goals effectively.