51Ƶ

Sweat Equity Partnership Agreement for India

Sweat Equity Partnership Agreement Template for India

A comprehensive legal agreement governed by Indian law that establishes the terms and conditions under which an individual or entity receives equity shares in a company in exchange for their expertise, know-how, or services, rather than monetary investment. The agreement complies with the Companies Act 2013 and SEBI regulations, detailing the nature of contribution, equity allocation, vesting schedule, rights and obligations of parties, and exit provisions. It includes specific provisions for valuation of services, regulatory compliance requirements, and protection mechanisms for both the company and the sweat equity partner.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Get template free

Your data doesn't train Genie's AI

You keep IP ownership of your docs

4.6 / 5
4.6 / 5
4.8 / 5

What is a Sweat Equity Partnership Agreement?

The Sweat Equity Partnership Agreement is a crucial document in the Indian business landscape, particularly utilized by startups and growing companies to attract and retain key talent without significant cash outlay. This agreement type is specifically regulated under Section 54 of the Companies Act 2013 and SEBI regulations, requiring careful structuring to ensure compliance with Indian corporate and securities laws. The document is typically used when companies wish to compensate individuals for their intellectual property, technical know-how, or valuable services by offering equity ownership instead of traditional compensation. It outlines the complete framework of the partnership, including contribution expectations, equity rights, vesting conditions, and exit mechanisms, while ensuring protection for both the company and the sweat equity partner.

What sections should be included in a Sweat Equity Partnership Agreement?

1. Parties: Identification of all parties entering into the agreement, including full legal names and addresses

2. Background: Context of the agreement, including the business purpose and reasons for entering into the sweat equity arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Sweat Equity Contribution: Detailed description of the services, know-how, or intellectual property being contributed as sweat equity

5. Equity Allocation: Specifics of the equity shares being offered, including percentage, class of shares, and valuation

6. Vesting Schedule: Timeline and conditions for the vesting of sweat equity shares

7. Rights and Obligations: Detailed rights and responsibilities of all parties, including management participation and decision-making powers

8. Non-Compete and Confidentiality: Restrictions on competition and protection of confidential information

9. Exit Provisions: Terms and conditions for partner exit, including share transfer restrictions and buyout provisions

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Dispute Resolution: Procedures for resolving disputes between parties

12. Governing Law: Specification of Indian law as governing law and jurisdiction

What sections are optional to include in a Sweat Equity Partnership Agreement?

1. Tag-Along Rights: Optional provision giving minority shareholders the right to join in the sale of shares by majority shareholders

2. Drag-Along Rights: Optional provision allowing majority shareholders to force minority shareholders to join in the sale of shares

3. Anti-Dilution Protection: Protection against dilution of equity stake in future funding rounds

4. Board Representation: Rights and terms for board membership, if applicable

5. Performance Metrics: Specific performance criteria tied to the vesting of sweat equity

6. Intellectual Property Assignment: Detailed provisions for IP assignment if the sweat equity involves intellectual property creation

7. Death and Disability Provisions: Procedures in case of death or permanent disability of the sweat equity partner

What schedules should be included in a Sweat Equity Partnership Agreement?

1. Schedule A - Services Description: Detailed description of services or expertise to be provided as sweat equity

2. Schedule B - Vesting Schedule: Detailed timeline and milestones for equity vesting

3. Schedule C - Share Valuation: Methodology and details of how the sweat equity shares have been valued

4. Schedule D - Performance Metrics: Specific performance criteria and evaluation methods

5. Schedule E - Company Information: Key company information including capital structure and existing shareholders

6. Appendix 1 - Shareholders' Agreement: Reference to or incorporation of existing shareholders' agreement terms

7. Appendix 2 - Required Regulatory Approvals: List of necessary regulatory approvals and compliance requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

India

Publisher

Genie AI

Cost

Free to use

Find the exact document you need

Non Profit Organization Partnership Agreement

A partnership agreement between non-profit organizations under Indian law, establishing terms for collaboration and shared charitable objectives.

Download

Model Partnership Agreement

A standardized partnership agreement template compliant with Indian law, establishing terms and conditions for business partnerships.

Download

Memorandum Of Understanding For Partnership

An Indian law-compliant preliminary agreement outlining key terms and conditions for establishing a business partnership, serving as a precursor to a formal Partnership Deed.

Download

Law Firm Partnership Deed

An Indian law-governed partnership agreement that establishes and regulates a law firm's structure, operations, and partner relationships.

Download

General Partnership Deed

A legal document under Indian law establishing a partnership between two or more persons to conduct business together and share profits.

Download

Agreement For Partnership Deed

An Indian law-compliant legal document that establishes and governs a business partnership, defining partners' rights, duties, and operational framework.

Download

Software Implementation Partner Agreement

An Indian law-governed agreement detailing terms and conditions for software implementation services between an implementation partner and client organization.

Download

Sleeping Partnership Agreement

An Indian law-governed agreement establishing a partnership where certain partners contribute capital without participating in business operations.

Download

Sleeping Partner Partnership Deed

An Indian law-governed partnership deed establishing the rights and obligations of sleeping (non-managing) and active partners in a business venture.

Download

Referral Partnership Agreement

An Indian law-governed agreement establishing terms and conditions for business referral partnerships, including commission structures and operational procedures.

Download

Realtor Partnership Agreement

An Indian law-governed agreement establishing a partnership between real estate professionals, ensuring RERA compliance and detailing operational framework.

Download

Real Estate Joint Venture Proposal

An Indian law-governed proposal document outlining terms and conditions for a real estate development joint venture, including project specifications, financial arrangements, and regulatory compliance requirements.

Download

Proposal For Joint Venture Letter

A formal business letter used in India to propose and initiate discussions for a potential joint venture partnership, outlining preliminary terms and structure under Indian law.

Download

Petrol Pump Partnership Agreement

An Indian law-governed agreement establishing a partnership for operating a petrol pump business, detailing operational, financial, and regulatory requirements.

Download

Partnership Deed For Transport Business

An Indian law-governed partnership agreement establishing a transport business venture, detailing partner rights, responsibilities, and operational procedures.

Download

Partnership Deed For Petrol Pump

An Indian law-governed partnership agreement for establishing and operating a petrol pump business, outlining partner rights, responsibilities, and operational procedures.

Download

Partnership Deed For LLP

An Indian legal document establishing the terms and conditions between partners in a Limited Liability Partnership (LLP), governed by the LLP Act, 2008.

Download

Partnership Deed For Film Production

An Indian law-governed partnership agreement for film production ventures, detailing partner rights, responsibilities, and profit-sharing arrangements.

Download

Partnership Deed Construction Business

A legal agreement under Indian law establishing a partnership for construction business operations, defining partner relationships and business terms.

Download

Partnership Deed Between Three Partners

An Indian law-governed agreement establishing a three-partner business partnership, defining rights, responsibilities, and operational framework under the Indian Partnership Act, 1932.

Download

Partnership Agreement Proposal

A formal proposal for establishing a business partnership under Indian law, outlining key terms and conditions for potential partners' consideration.

Download

Private Limited Company Partnership Agreement

An Indian law-governed agreement establishing partnership terms and conditions between shareholders in a private limited company, outlining rights, responsibilities, and operational framework.

Download

Partnership Agreement For Hotel Business

An Indian law-governed agreement establishing a partnership structure for hotel business operations, including operational, financial, and management provisions.

Download

Technology Partner Agreement

An Indian law-governed agreement establishing terms and conditions for technology service partnerships between providers and client organizations.

Download

Venture Capital Partnership Agreement

An Indian law-governed agreement establishing a venture capital partnership structure, defining relationships between fund managers and investors while ensuring regulatory compliance.

Download

Non Binding Partnership Agreement

A preliminary agreement under Indian law that outlines proposed partnership terms while maintaining a non-binding status, allowing parties to negotiate and explore collaboration possibilities.

Download

Letter For Partnership Agreement

An Indian legal document establishing a partnership arrangement between parties, outlining key terms and conditions under Indian Partnership Act requirements.

Download

Salon Business Partnership Agreement

An Indian law-governed agreement establishing a partnership structure for operating a salon business, including operational, financial, and regulatory terms.

Download

Rent Agreement For Partnership Firm

An Indian law-governed rental agreement specifically designed for partnership firms leasing property for business purposes, incorporating partnership-specific legal requirements and standard rental terms.

Download

Partnership Deed For Real Estate Business

An Indian law-governed partnership deed establishing terms and conditions for a real estate business partnership, incorporating RERA compliance requirements.

Download

Reseller Agreement For Software Products

An Indian law-governed agreement establishing terms for software distribution through authorized resellers, including licensing, sales rights, and operational requirements.

Download

Real Estate Agent Partnership Agreement

An Indian law-governed agreement establishing a partnership between real estate agents/firms, ensuring RERA compliance and defining operational framework.

Download

Partnership Deed For Hotel Business

A legal agreement under Indian law establishing a partnership structure for hotel business operations, defining partner relationships and business management terms.

Download

Authorized Reseller Agreement

An Indian law-governed agreement establishing terms and conditions between a manufacturer/principal and authorized reseller for product distribution and resale.

Download

Joint Venture Proposal

An Indian law-governed proposal document outlining the key terms and structure of a proposed joint venture between multiple parties, serving as the foundation for detailed negotiations.

Download

Short Partnership Agreement

A concise partnership agreement template compliant with Indian law, establishing core terms and conditions for business partnerships.

Download

Social Media Partnership Agreement

An Indian law-governed agreement establishing terms and conditions for social media partnerships, including content creation, compliance, and commercial terms.

Download

Partnership Deed

An Indian law-governed agreement establishing a partnership between two or more parties, defining their rights, responsibilities, and business relationship under the Indian Partnership Act, 1932.

Download

Online Business Partnership Agreement

An Indian law-governed agreement establishing partnership terms for online business operations, including digital assets, operations, and compliance requirements.

Download

Buy Sell Agreement Between Business Partners

An Indian law-governed agreement establishing terms for transfer of business ownership interests between partners, including valuation and execution procedures.

Download
See more related templates

ұԾ’s Security Promise

Genie is the safest place to draft. Here’s how we prioritise your privacy and security.

Your documents are private:

We do not train on your data; ұԾ’s AI improves independently

All data stored on Genie is private to your organisation

Your documents are protected:

Your documents are protected by ultra-secure 256-bit encryption

We are ISO27001 certified, so your data is secure

Organizational security:

You retain IP ownership of your documents and their information

You have full control over your data and who gets to see it