Deed of adherence in short
When doling out shares in your business, there are a number of considerations. Beyond deciding how to slice and dice equity, you’ll also need to consider the kind of documentation required when issuing shares.
When to use: Often, the issuing of new shares will require a “deed of adherence”, which essentially confirms that a shareholder agrees to abide by the terms of an existing shareholders’ agreement. This particular template should be used if the new shareholder is an individual.
Usually required: A company's articles of association or shareholders' agreement usually stipulates that a company cannot issue or register the transfer shares to a new shareholder unless that new shareholder has signed a 'Deed of Adherence', under which they agree to become bound by the terms of a shareholders' agreement as if they were originally a party to it. This is necessary so that the company and the shareholders can enforce the terms of the shareholders’ agreement against each other in the event of a breach of its terms. This ensures that a new shareholder can enforce the terms of the relevant shareholders' agreement against the company and existing shareholders and vice versa.
Assumption: It’s worth noting, you would not use this document if you’re negotiating a new shareholders' agreement with an investor. This document assumes that a company already has a shareholders’ agreement in place.
Why use Docue’s deed of adherence template?
Legal protection - by using this deed of adherence template, the parties can rest assured that they are effectively binding the new shareholders to the original shareholders’ agreement and leave no room for mistakes.
Clear understanding - this deed of adherence template clarifies the obligations and rights of the parties involved, ensuring that the new shareholder understands its role and responsibilities as if it was an original party to the shareholders’ agreement.
Time and cost-efficient - to use this deed of adherence template, all you need to do is enter the parties’ details and the details of the original contract, and Docue will automatically generate a legally binding deed that is tailored to your specific requirements. The template is fully customizable, so you can modify any of the clauses to suit your needs and the terms of the original agreement.
Dynamic template: In order to create your deed of adherence with confidence and speed, simply click through the intelligent tick box options and text box answers and you’ll have a comprehensive, tailored, and ready-to-use document in no time.
Lawyer-made content: This template is drafted and maintained by UK qualified lawyers.