An investment contract should also determine whether the investor has management or control rights within the company. For example, investors sometimes get voting rights that allow them to have a say in business and management. Investors may have the right to vote for directors or executives. For small businesses, an investor may have the direct right to control the day-to-day life of businesses. In your investment contract, you must indicate the type of reports that the investor can expect regarding the finances of the company and whether the investor has the right to check the accounts. This part of the investment contract should include the name, title, address, telephone number, fax number, email address and preferred contact for both companies. For more advice on investment contracts or shareholder contracts from our corporate lawyers, contact us on 0800 689 1700, email us at email@example.com or fill out the abbreviated form below with your request. There can be many similarities between an investment contract and a shareholder pact. The investor may be an existing shareholder of the company and may therefore have entered into an early shareholders` agreement with the company and its shareholders prior to the investment, or it may be a new investor. The investor can also be a leading investor representing a consortium of investors. It is important to know how they prepare an investment agreement before making a new investment in your business. This article examines the key provisions that should be incorporated into an investment agreement and outlines the possibilities for a company to protect itself and ensure the security of its relationship with a new investor. A thorough review of a draft existing investment contract is needed to identify areas that need to be adapted.
The main standard information includes the number of shares offered, the price of each share and a guarantee and representation sector that verifies that an investor is qualified to buy shares of private companies. Other important inclusions are a compensation clause that requires investors to pay the company fines that threaten the company if an unqualified investor shows up incorrectly. Restrictive agreements such as a confidentiality clause, a non-compete agreement and a clause prohibiting investors from recruiting existing customers or damaging the name or reputation of the company are also important. The date of the agreement and the names and addresses of the parties to the contract should be indicated. If so, use the company name and address, as the company`s contact will be identified later in the agreement. Jerry Garner has been a semi-professional for over 15 years. Garner`s work includes informative articles, news and current events, as well as historical essays. He is a sports enthusiast and often writes about outdoor activities on the Internet. The terms of the investment depend on the type of financing the company needs (for example.B. Is the investor required to proceed with multiple financing cycles? Should the investor provide immediate interim financing before the main investment round?) and the nature of the financing agreements will determine the negotiating power of the parties in negotiating the investment agreement. The main difference between an investment agreement and a shareholders` pact is that a shareholders` pact is a contract between a company and its existing shareholders (although new shareholders may be included in a shareholders` pact by signing an agreement to respect the agreement) in order to define rules on the behaviour of shareholders and the rights and obligations they have with respect to general operations, management and strategy of a company.