Deed of Adherence to Shareholder Agreement

What is a deed of adherence to a shareholder agreement and when should you use it?

A Deed of Adherence is used in circumstances where you’re onboarding a new investor to your business and the investor becomes a shareholder in your company, either by acquiring shares from an existing shareholder or by subscribing for new shares.

It should be used where there is already a Shareholders’ Agreement in place between the existing shareholders.

Especially in the early stages of your company’s existence and with early investment rounds, investors are often happy to sign a deed of adherence to your existing agreement, so that they have the comfort of knowing they are on the same terms as other shareholders.

What else might you need?

If you’re offering shares in your business, it’s highly advisable to take legal and tax advice to ensure that you’re structuring the best deal and tax efficient arrangements as possible.