When a company transfers its undertaking, properties and liabilities to one or more existing undertaking or new undertaking it is precisely known as Demerger. Interestingly, companies act no where defines or talks about the Merger or Amalgamation or Demerger, rather section 230 of the companies act, 2013 defines it as the compromise or arrangement between … Continue reading What is Demerger? Insights on Why Companies Opt for Demerger
DECODING THE TERM SHEET
TERM SHEET A term sheet is the initial document i.e. signed between the investors and startup. Term sheet itself is not legally binding document but many time this document is exchanged with the confidentiality and related agreements. Although Term sheet may not be legally binding but it is like an architect plan which set forth … Continue reading DECODING THE TERM SHEET
Understanding Promoter Lock-In: Importance for Investors
PROMOTER LOCK-IN Promoter or Founder Lock-In is a standard clause in most Shareholder Agreements that prohibits the promoter/founder group to sell their shares to anyone without the prior written consent of the Investor. WHY DO INVESTORS INSIST FOR A PROMOTER LOCK-IN? Retain Skin in the game (SITG): Promoters have the maximum stake/SITG in their company. … Continue reading Understanding Promoter Lock-In: Importance for Investors
Understanding Drag-Along Rights in Shareholder Agreements
What is “Drag Along” clause in Share Holding Agreement/ equity funding term sheets? Drag-along rights allow majority shareholders to compel minority shareholders to sell their shares in the event of a third-party sale. The intent is to avoid minority shareholders blocking a sale and to secure higher valuation and strategic benefits for the selling majority … Continue reading Understanding Drag-Along Rights in Shareholder Agreements
DUCTUS EDGE 