Share vesting agreements – could compulsory acquisition be a penalty?

In the Australian start-up community, we appear to have adopted most of the terminology from the United States, notwithstanding that the laws in relation to shares, options, loans (Securities) are completely different.   One such “imported term” is the “Vesting Schedule” which is commonly utilised in a Share Vesting Agreement.   The principle is simple enough, individuals contribute to a start-up (Startup) work to build a product or service and are given equity in the business (Company) in exchange for their efforts (Sweat for Equity Deal).  A Share Vesting Agreement will usually contains a Vesting Schedule which describes the rights and obligations of the participants by which their Securities vest, or are cancelled if the person fails to achieve certain milestones.  Whilst Securities is a broader term, generally in the case of start-ups we refer to various classes of shares in a proprietary limited company incorporated under Australian law.

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Prohibition on the acquisition of a relevant interest

Section 606 of the Corporations Act 2001 (Cth) (Corps Act) contains a prima facie prohibition against the acquisition of relevant interests in voting shares.

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How big does your company need to be to list on the ASX?

Last updated 21 May 2016

For many organisations, achieving an exit for its members via a listing of its securities on the stock exchange may be highly desirable, but for the uninitiated, it can be a complex and somewhat daunting process.   A consultation paper released by the ASX on 12 May 2016 proposes changes to these criteria.  Read our summary of the proposed changes to the eligibility requirements. [Read more…]

What do Shareholders’ Agreements protect against?

A Shareholders Agreement is a contract that attempts to regulate the rights and obligations of Shareholders or Members (used interchangeably) in the context of their ownership of securities in a Company. [Read more…]

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