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Stock Agreement
I need a stock agreement for a new employee who will be granted restricted stock units (RSUs) as part of their compensation package. The agreement should include vesting schedules over four years, with a one-year cliff, and specify conditions for forfeiture and acceleration in the event of a company acquisition.
What is a Stock Agreement?
A Stock Agreement sets out the rules and rights when buying, selling, or transferring company shares in Denmark. It's a binding contract that spells out key terms like share pricing, transfer restrictions, and what happens if a shareholder wants to exit the company or passes away.
Danish companies often use these agreements to protect both majority and minority shareholders under the Danish Companies Act. They're especially important for privately held firms, where they help prevent unwanted third parties from acquiring shares and ensure smooth ownership transitions. The agreement can include specific provisions like right of first refusal, tag-along rights, and procedures for share valuation.
When should you use a Stock Agreement?
A Stock Agreement becomes essential when founding a Danish company with multiple shareholders or bringing new investors on board. It's particularly valuable when setting up startups, family businesses, or professional partnerships where clear ownership rules matter from day one.
Use this agreement before any share transfers take place or when planning future ownership changes. Danish businesses need it to handle scenarios like shareholders retiring, selling their stakes, or passing shares to heirs. It's also crucial when adding anti-dilution protection for early investors or creating specific share classes with different voting rights under Danish corporate law.
What are the different types of Stock Agreement?
- Stock Buyback Agreement: Used when a company repurchases shares from existing shareholders, often for employee exits or capital restructuring
- Stock Sale Contract: Covers straightforward share transfers between willing buyers and sellers
- Sale Of Shares Contract: More detailed version for complex transactions, including warranties and indemnities
- Share Vesting Agreement: Gradually grants shares to employees or founders over time
- Share Charge Agreement: Creates security over shares for lending arrangements
Who should typically use a Stock Agreement?
- Company Founders: Create and sign Stock Agreements when establishing their business structure and defining initial ownership stakes
- Corporate Lawyers: Draft and review agreements to ensure compliance with Danish corporate law and protect client interests
- Board Members: Approve and oversee share transfers, especially in privately held companies
- Investors: Negotiate terms when buying into Danish companies, often requiring specific rights and protections
- Shareholders: Both majority and minority owners bound by the agreement's terms for share transfers and voting rights
- Company Secretary: Maintains share registers and ensures proper documentation of ownership changes
How do you write a Stock Agreement?
- Company Details: Gather full legal names, CVR numbers, and registered addresses of all parties involved
- Share Information: Document the total number of shares, classes, nominal values, and current ownership structure
- Transfer Terms: Define price calculation methods, payment terms, and any transfer restrictions
- Rights Package: List voting rights, dividend rights, and any special privileges per share class
- Exit Procedures: Specify rules for selling shares, including right of first refusal and tag-along rights
- Documentation: Collect existing articles of association and shareholder records to ensure alignment
- Platform Usage: Use our automated system to generate a legally compliant agreement that includes all required elements
What should be included in a Stock Agreement?
- Party Information: Full legal names, addresses, and CVR numbers of all shareholders and the company
- Share Details: Precise description of share classes, numbers, nominal values, and rights attached
- Transfer Provisions: Rules for selling shares, including pre-emptive rights and valuation methods
- Voting Rights: Clear outline of voting procedures and any special majority requirements
- Exit Mechanisms: Drag-along and tag-along rights, plus deadlock resolution procedures
- Governing Law: Explicit reference to Danish corporate law and jurisdiction
- Dispute Resolution: Specified method for handling disagreements under Danish arbitration rules
- Signatures: Space for dated signatures of all parties, with witness requirements if needed
What's the difference between a Stock Agreement and a Stock Option Agreement?
A Stock Agreement differs significantly from a Stock Option Agreement in both purpose and timing. While both deal with company ownership, they serve distinct functions under Danish corporate law.
- Immediate vs. Future Rights: Stock Agreements handle current share ownership and transfers, while Stock Option Agreements grant the right to purchase shares at a future date
- Ownership Status: Stock Agreement holders are immediate shareholders with voting and dividend rights; option holders have no shareholder rights until they exercise their options
- Transfer Restrictions: Stock Agreements include detailed rules about selling existing shares; option agreements focus on conditions for future share acquisition
- Risk Profile: Stock Agreement holders face immediate market risks as owners; option holders only risk their option premium until exercise
- Legal Requirements: Stock Agreements must comply with immediate shareholder rights under Danish law; option agreements need additional exercise and vesting provisions
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