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An Equity Agreement sets out how ownership stakes are divided among shareholders in a Pakistani company. It's the key document that spells out who owns what percentage of the business, how profits will be shared, and what rights each shareholder holds. These agreements follow the Companies Act 2017 and must be registered with the Securities and Exchange Commission of Pakistan (SECP).

Beyond basic ownership details, these agreements cover critical points like voting rights, dividend policies, and restrictions on selling shares. They're especially important for startups and family businesses in Pakistan, where clear ownership structures help prevent future disputes and make it easier to attract investment. The agreement also needs to align with Islamic finance principles when applicable.

Create an Equity Agreement when starting a new business venture in Pakistan, particularly when multiple founders or investors are involved. This document becomes essential before accepting outside investment, during partnership formations, or when restructuring ownership within an existing company. The SECP requires clear documentation of shareholding structures, making this agreement a fundamental starting point.

Use it to prevent future ownership disputes by documenting exact share percentages, voting rights, and profit-sharing mechanisms from day one. An Equity Agreement is particularly crucial for family businesses transitioning between generations, tech startups seeking venture capital, and joint ventures where multiple parties contribute different assets or expertise to the business.

• Stock Purchase Agreement Private Company: Standard form for selling company shares to new investors, commonly used in Pakistani private companies
• Limited Partnership Agreement Private Equity: Specialized agreement for private equity investments, defining roles between general and limited partners
• Private Equity Subscription Agreement: Used when investors subscribe to new shares in funding rounds
• Simple Agreement For Equity: Streamlined version popular with startups for quick capital raising
• Preferred Stock Agreement: For issuing shares with special rights and privileges to investors

• Company Founders: Create and sign Equity Agreements when establishing ownership structures, often consulting with legal advisors to ensure SECP compliance
• Private Investors: Review and negotiate terms before purchasing shares, particularly focused on voting rights and profit-sharing mechanisms
• Corporate Lawyers: Draft and revise agreements to align with Pakistani corporate law and Islamic finance principles
• Board Members: Approve and oversee implementation of equity structures and subsequent modifications
• Family Business Owners: Use these agreements to formalize succession planning and distribute shares among family members
• Company Secretary: Maintains official records and ensures proper filing with regulatory authorities

• Company Details: Gather incorporation certificate, NTN number, and SECP registration documents
• Shareholder Information: Collect CNIC copies, investment amounts, and agreed ownership percentages for all parties
• Share Structure: Define share classes, voting rights, and dividend preferences clearly
• Valuation Details: Document company valuation method and agreed share price
• Transfer Rights: Outline pre-emptive rights, right of first refusal, and tag-along provisions
• Exit Strategy: Specify conditions for share transfer, buyback options, and dispute resolution mechanisms
• Digital Platform: Use our automated system to generate a customized, legally-compliant agreement that includes all essential elements

• Parties and Recitals: Full legal names, CNICs, and addresses of all shareholders and the company
• Share Details: Precise number, class, and value of shares being issued or transferred
• Consideration: Clear statement of payment terms and valuation methodology
• Rights and Restrictions: Voting rights, dividend rights, and transfer limitations under Companies Act 2017
• Corporate Governance: Board representation, quorum requirements, and decision-making processes
• Exit Mechanisms: Put/call options, drag-along and tag-along rights
• Shariah Compliance: Statement of adherence to Islamic finance principles where applicable
• Dispute Resolution: Arbitration clause following Pakistani ADR laws

While both documents deal with ownership rights, an Equity Agreement differs significantly from a Simple Agreement for Future Equity (SAFE) in several key aspects under Pakistani law. An Equity Agreement establishes immediate ownership rights, while a SAFE represents a promise of future equity based on specific trigger events.

• Timing of Rights: Equity Agreements grant immediate shareholding status, while SAFEs only convert to equity upon future events like funding rounds or exits
• Valuation Requirements: Equity Agreements need a defined company valuation at signing, whereas SAFEs defer valuation until conversion
• Legal Complexity: Equity Agreements require more extensive documentation and SECP compliance, while SAFEs are simpler instruments often used by startups
• Shareholder Rights: Equity Agreements provide immediate voting and dividend rights; SAFE holders typically have no such rights until conversion