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Restricted Share Agreement Template for India

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Key Requirements PROMPT example:

Restricted Share Agreement

"I need a Restricted Share Agreement for our Series B startup in Bangalore, granting 10,000 shares to our new CTO with a 4-year vesting schedule starting March 2025, including a one-year cliff and standard good/bad leaver provisions."

Document background
The Restricted Share Agreement is a crucial document used by Indian companies to grant shares to employees, directors, or consultants while maintaining certain restrictions on ownership and transfer. This agreement type is particularly important in the Indian corporate landscape where companies must comply with strict regulatory requirements under the Companies Act 2013, SEBI regulations, and relevant tax laws. The document is commonly used as part of employee compensation packages, retention strategies, or corporate restructuring, establishing specific vesting conditions and transfer restrictions. It details the grant terms, vesting schedule, shareholder rights, tax implications, and compliance requirements, while protecting both the company's interests and ensuring fairness to the share recipient.
Suggested Sections

1. Parties: Identification of the company issuing shares and the recipient(s)

2. Background: Context of the agreement, including corporate authorizations and purpose of the share grant

3. Definitions: Key terms used throughout the agreement

4. Grant of Restricted Shares: Details of shares being granted, including number, class, and nominal value

5. Vesting Schedule: Timeline and conditions for vesting of shares

6. Transfer Restrictions: Limitations on transfer of shares during restriction period

7. Rights and Obligations: Shareholder rights during restricted period and compliance obligations

8. Taxation: Tax implications and responsibilities of both parties

9. Termination Provisions: Consequences of employment termination or breach of conditions

10. Regulatory Compliance: Compliance with SEBI regulations and other applicable laws

11. Representations and Warranties: Standard declarations by both parties

12. Confidentiality: Protection of confidential information

13. Governing Law and Jurisdiction: Applicable law and dispute resolution mechanism

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

Optional Sections

1. Employment Relationship: Required if recipient is an employee, defining relationship between employment and share grant

2. Foreign Investment Compliance: Required if recipient is a foreign national, addressing FEMA compliance

3. Tag-Along Rights: Optional protection for minority shareholders in case of majority stake sale

4. Drag-Along Rights: Optional provision allowing majority shareholders to force minority participation in sale

5. Corporate Governance Rights: Optional provisions for voting rights and board representation

6. Lock-in Period: Additional transfer restrictions beyond vesting period if required

7. Put/Call Options: Optional rights for forced sale or purchase under specific circumstances

Suggested Schedules

1. Schedule 1 - Share Details: Detailed description of shares including class, rights, and nominal value

2. Schedule 2 - Vesting Schedule: Detailed timeline and conditions for vesting of shares

3. Schedule 3 - Deed of Adherence: Form of deed to be signed by transferees of shares

4. Schedule 4 - Shareholders' Agreement: Key provisions of existing shareholders' agreement affecting these shares

5. Schedule 5 - Corporate Authorizations: Copies of board and shareholder resolutions approving the grant

6. Appendix A - Share Certificate Format: Format of physical share certificates if applicable

7. Appendix B - Tax Implications: Detailed explanation of tax treatment and obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Healthcare

Telecommunications

E-commerce

Consulting

Real Estate

Energy

Pharmaceuticals

Information Technology

Banking

Relevant Teams

Legal

Human Resources

Finance

Compliance

Corporate Secretarial

Tax

Executive Leadership

Board of Directors

Compensation & Benefits

Relevant Roles

CEO

CFO

General Counsel

HR Director

Company Secretary

Legal Counsel

Compliance Officer

Board Director

Senior Executive

VP of Human Resources

Financial Controller

Corporate Lawyer

Compensation Manager

Tax Manager

Employee Benefits Manager

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

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