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Startup Equity Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Startup Equity Agreement

I need a Startup Equity Agreement for my Hong Kong fintech company to issue Series A preferred shares to two venture capital firms, with anti-dilution protection and board appointment rights, planned for completion by March 2025.

Document background
The Startup Equity Agreement is a crucial document used when a Hong Kong startup company issues shares to new or existing shareholders, typically during funding rounds or equity restructuring. Operating under Hong Kong's legal framework, particularly the Companies Ordinance (Cap. 622) and Securities and Futures Ordinance, this agreement serves as the fundamental document governing the relationship between the company and its shareholders. It addresses key aspects such as share subscription terms, shareholder rights and obligations, transfer restrictions, and corporate governance matters. The agreement is particularly important for protecting both the company's interests and shareholders' rights while ensuring compliance with Hong Kong's regulatory requirements for private companies. This document is essential for startups seeking investment, implementing employee equity programs, or restructuring their share capital.
Suggested Sections

1. Parties: Identifies all parties to the agreement including the company, existing shareholders, and new investors

2. Background: Sets out the context of the agreement, including company information and purpose of the equity issuance

3. Definitions: Defines key terms used throughout the agreement

4. Subscription and Issue of Shares: Details the number, class, and price of shares being issued

5. Completion: Specifies the conditions precedent, timing, and process for completing the share issue

6. Representations and Warranties: Key statements and guarantees made by the company and existing shareholders

7. Share Transfer Restrictions: Limitations on transferring shares, including right of first refusal and tag-along rights

8. Shareholder Rights: Voting rights, dividend rights, and other shareholder privileges

9. Confidentiality: Obligations regarding confidential information

10. Term and Termination: Duration of the agreement and circumstances for termination

11. General Provisions: Standard clauses including governing law, notices, and amendment procedures

Optional Sections

1. Anti-dilution Protection: Protects investors from dilution in future funding rounds, included when negotiated by investors

2. Drag-along Rights: Enables majority shareholders to force minority shareholders to join in the sale of the company

3. Board Representation: Grants investors right to appoint board members, included when investors require board seats

4. Protective Provisions: Special voting rights for certain corporate actions, included for significant investors

5. Employee Share Option Pool: Provisions for employee equity incentives, included if company plans to offer employee equity

6. Founder Vesting: Vesting schedule for founder shares, included for early-stage startups

7. Information Rights: Specific rights to company information and financials, included for major investors

Suggested Schedules

1. Schedule 1: Share Capital Structure: Details of the company's share capital structure pre and post-investment

2. Schedule 2: Particulars of the Company: Company details including registration number, registered office, and directors

3. Schedule 3: Conditions Precedent: List of conditions to be satisfied before completion

4. Schedule 4: Warranties: Detailed warranties given by the company and existing shareholders

5. Schedule 5: Share Transfer Notice: Form of notice for transferring shares

6. Appendix A: Shareholders' Particulars: Details of all shareholders including contact information

7. Appendix B: Reserved Matters: List of actions requiring special shareholder approval

Authors

Alex Denne

Head of Growth (Open Source Law) @ 红杏直播 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions











































Clauses






























Relevant Industries

Technology

Financial Services

E-commerce

Healthcare

Biotechnology

Manufacturing

Professional Services

Consumer Goods

Software Development

Green Technology

Education Technology

Digital Media

Artificial Intelligence

Fintech

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Investment

Compliance

Corporate Governance

Administrative

Company Secretarial

Relevant Roles

CEO

Founder

Managing Director

Chief Financial Officer

Corporate Lawyer

Investment Manager

Venture Capitalist

Company Secretary

Legal Counsel

Compliance Officer

Board Director

Investment Analyst

Private Equity Manager

Startup Advisor

Finance Director

Industries






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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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