Bvca Model Subscription and Shareholders Agreement

BVCA Model Subscription and Shareholders Agreement: Essential Provisions for Your Business

When it comes to setting up a business, one of the most important steps is drafting a subscription and shareholders agreement. This document lays out the terms of investment and ownership in the company, and it provides a framework for how shareholders will work together and make decisions. The BVCA (British Private Equity & Venture Capital Association) has put together a model subscription and shareholders agreement that serves as a helpful guide for companies looking to create their own agreements.

Here are some key provisions that should be included in a subscription and shareholders agreement based on the BVCA model:

1. Shareholding Structure

The agreement should clearly outline the shareholding structure of the business, including the number of shares in existence and the rights attached to each class of shares. This will help prevent disputes down the line by clearly defining each shareholder`s ownership stake.

2. Transferability of Shares

The agreement should include provisions for the transfer of shares, including any restrictions on transferability. This is important to avoid unwanted shareholders and to maintain control over the ownership structure of the business.

3. Board of Directors

The agreement should outline the composition of the board of directors and how they will be appointed. It should also lay out the powers and responsibilities of the board, including the ability to make decisions on behalf of the company.

4. Decision Making

The agreement should establish a framework for decision making, including how decisions will be made and how voting rights will be allocated. This will help ensure that important decisions are made in a fair and transparent manner.

5. Dividend Policy

The agreement should detail the company`s dividend policy, including how and when dividends will be paid out. This will help provide clarity for shareholders and prevent disagreements over the distribution of profits.

6. Exit Strategy

Finally, the agreement should include provisions for how the company will be sold or dissolved, in the event that shareholders decide to move on from the business. This will help ensure a smooth transition and protect the interests of all stakeholders.

In conclusion, a subscription and shareholders agreement is a crucial document for any business looking to raise capital and establish a clear ownership structure. By following the guidelines set forth in the BVCA model agreement, companies can create a document that is fair, transparent, and legally enforceable. Whether you`re a startup or an established business, investing time and resources into a robust subscription and shareholders agreement is a smart move that can pay dividends down the line.