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Equity Promissory Note Template for Singapore

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Key Requirements PROMPT example:

Equity Promissory Note

"Need an Equity Promissory Note for our Singapore tech startup to secure bridge financing of SGD 500,000 from an angel investor, with a 2% monthly interest rate and automatic conversion upon our Series A round expected in March 2025."

Document background
The Equity Promissory Note is commonly used in Singapore's startup and growth company ecosystem as a bridge financing tool. It provides companies with immediate access to capital while offering investors the flexibility to convert their investment into equity shares. This document type must comply with Singapore's regulatory framework and typically includes specific terms regarding conversion rights, interest rates, and maturity dates. The Equity Promissory Note structure is particularly useful when companies need interim financing before a larger funding round or when parties want to defer equity valuation discussions.
Suggested Sections

1. Parties: Identification of issuer and holder(s) of the note

2. Background: Context of the note issuance and relationship between parties

3. Definitions: Key terms used throughout the document

4. Promise to Pay: Core obligation to pay specified amount or issue equity

5. Conversion Terms: Conditions and mechanism for converting note to equity

6. Payment Terms: Interest rates, payment schedules, and methods

7. Events of Default: Circumstances constituting default and consequences

Optional Sections

1. Security: Collateral provisions if note is secured - use when note is secured by assets

2. Subordination: Priority ranking relative to other debt - use when multiple creditors exist

3. Transfer Restrictions: Limitations on transfer of the note - use when transferability needs to be restricted

Suggested Schedules

1. Form of Conversion Notice: Template for exercising conversion rights

2. Calculation of Conversion Price: Formula and examples for determining conversion price

3. Copy of Board Resolution: Evidence of corporate approval for note issuance

4. Security Details: Description of any collateral (if applicable)

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

Relevant legal definitions


























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Industries

Companies Act (Cap. 50): Primary legislation governing corporate entities in Singapore, covering company formation, share issuance, and corporate governance requirements

Securities and Futures Act (Cap. 289): Regulates securities offerings, trading, and investment products in Singapore, including requirements for securities issuance and transfer

Contract Law (Application of Law) Act: Establishes the fundamental principles of contract formation and enforcement in Singapore

Bills of Exchange Act (Cap. 23): Governs negotiable instruments including promissory notes, establishing requirements for their creation and enforcement

MAS Regulations: Regulatory framework established by the Monetary Authority of Singapore governing financial instruments and securities

Securities and Futures (Offers of Investments) Regulations: Specific regulations governing the offering and issuance of investment products, including disclosure requirements

Financial Advisers Act: Regulates financial advisory services and requirements for offering financial products

Constitutional Documents Compliance: Requirements to ensure alignment with company's memorandum and articles of association regarding share issuance

Share Issuance Requirements: Specific rules and limitations regarding the issuance of new shares or equity instruments

Board Approval Protocol: Corporate governance requirements for obtaining necessary board approvals for equity instruments

Interest Rate Regulations: Compliance with Singapore's regulations regarding interest rates and usury laws

Stamp Duty Requirements: Tax obligations related to the execution and transfer of equity instruments under Singapore law

Income Tax Implications: Tax considerations for both issuer and holder of the equity promissory note under Singapore tax law

Transfer Restrictions: Legal requirements and limitations regarding the transfer of equity promissory notes

Default Provisions: Legal framework governing default scenarios and enforcement mechanisms under Singapore law

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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