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How to make a an agreement for distribution of shares


07-May-2023 (In Startup Law)

I am developing a new company with my friend,we have agreed that he will exit from the company after two years, i'll hold 72% and he'll hold 28% What is the procedure to make sure it in advance

Answers (1)

Answer #1
926 votes
You could provide for a vesting period. Basically, make a provision in your Articles of Association that the Partner shall 'vest' his shares with the company and that if he leaves prior to 2 years, the Company or you as the other shareholder shall have the right to purchase his shares from him at the face value of the shares (which in most cases is Rs. 10/- per share).
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