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Restrictive Covenants Shareholders Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Restrictive Covenants Shareholders Agreement

"I need a Restrictive Covenants Shareholders Agreement for my Hong Kong technology startup, with specific focus on protecting our AI intellectual property and preventing shareholders from working with competitors in the Asia-Pacific region for 24 months after exit."

What is a Restrictive Covenants Shareholders Agreement?

The Restrictive Covenants Shareholders Agreement is essential for Hong Kong companies seeking to protect their business interests, intellectual property, and competitive advantage. It is particularly relevant when bringing in new shareholders or when existing shareholders have access to sensitive business information. The document establishes legally binding restrictions on shareholders' activities during and after their association with the company, including non-compete, non-solicitation, and confidentiality provisions. Under Hong Kong law, such restrictions must be reasonable in scope, duration, and geographic reach to be enforceable. The agreement typically includes detailed provisions about protected information, restricted activities, and enforcement mechanisms, while ensuring compliance with Hong Kong's Companies Ordinance and Competition Ordinance.

What sections should be included in a Restrictive Covenants Shareholders Agreement?

1. Parties: Identification of all shareholders and the company

2. Background: Context of the agreement and relationship between parties

3. Definitions and Interpretation: Defined terms and interpretation rules

4. Restrictive Covenants: Core non-compete, non-solicit, and confidentiality provisions

5. Duration and Geographic Scope: Temporal and territorial limits of restrictions

6. Shareholders' Obligations: General obligations and duties of shareholders

7. Share Transfer Restrictions: Limitations on transfer of shares and right of first refusal

8. Confidential Information: Definition and protection of confidential information

9. Intellectual Property: Protection and ownership of IP rights

10. Enforcement: Mechanisms for enforcing restrictive covenants

11. Remedies: Available remedies for breach of covenants

12. Termination: Circumstances and process for termination

13. Dispute Resolution: Process for resolving disputes

14. General Provisions: Standard boilerplate clauses

What sections are optional to include in a Restrictive Covenants Shareholders Agreement?

1. Employee Shareholders: Additional provisions for shareholders who are also employees

2. Tag-Along and Drag-Along Rights: Include when shareholders might need protection in sale scenarios

3. Multiple Share Classes: When company has different classes of shares with varying rights

4. International Provisions: For agreements involving cross-border shareholders or operations

5. Regulatory Compliance: For companies in regulated industries or with specific compliance requirements

6. Digital Assets and Data: For companies with significant digital assets or data-driven operations

7. Good/Bad Leaver Provisions: For agreements where shareholder exit terms depend on circumstances

What schedules should be included in a Restrictive Covenants Shareholders Agreement?

1. Schedule 1 - Shareholder Details: List of shareholders with their shareholdings and contact details

2. Schedule 2 - Restricted Business Activities: Detailed description of prohibited business activities

3. Schedule 3 - Restricted Territories: Geographic areas where restrictions apply

4. Schedule 4 - Confidential Information: Detailed list of what constitutes confidential information

5. Schedule 5 - Share Transfer Procedures: Detailed procedures for share transfers

6. Schedule 6 - Deed of Adherence: Form for new shareholders to sign up to the agreement

7. Schedule 7 - Competitor List: List of specific competitors covered by non-compete provisions

8. Schedule 8 - Valuation Methodology: Methods for valuing shares in transfer scenarios

Authors

Alex Denne

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

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Relevant Industries

Technology

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Relevant Teams

Legal

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Compliance

Executive Management

Board of Directors

Corporate Development

Mergers & Acquisitions

Shareholder Relations

Risk Management

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Relevant Roles

Chief Executive Officer

Chief Legal Officer

General Counsel

Company Secretary

Chief Financial Officer

Corporate Lawyer

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Board Director

Managing Director

Chief Operating Officer

Head of Corporate Development

Investment Director

Shareholder Relations Manager

Corporate Governance Officer

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