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Stock Agreement
I need a stock agreement for issuing shares to a new investor, detailing the number of shares, the price per share, and any vesting schedule. The agreement should comply with Dutch regulations and include provisions for transfer restrictions and shareholder rights.
What is a Stock Agreement?
A Stock Agreement sets out the rules and conditions for buying, selling, or transferring company shares in the Dutch market. It protects both shareholders and the company by clearly spelling out important details like share pricing, transfer restrictions, and voting rights under Dutch corporate law.
Beyond just covering basic share ownership, these agreements often include key provisions like drag-along rights, tag-along rights, and anti-dilution protection. Dutch companies commonly use them when bringing in new investors, setting up employee share schemes, or managing shareholder exits. They must align with the Dutch Civil Code (Burgerlijk Wetboek) and specific requirements for BV and NV company structures.
When should you use a Stock Agreement?
Use a Stock Agreement when bringing new shareholders into your Dutch company or restructuring existing share ownership. This agreement becomes essential during fundraising rounds, when setting up employee stock options, or before a planned merger or acquisition under Dutch corporate law.
It's particularly valuable when your company needs to protect minority shareholders, maintain control over share transfers, or establish clear exit procedures. For Dutch BVs and NVs, having this agreement in place before share transactions begin helps prevent costly disputes and ensures compliance with both statutory requirements and shareholders' interests. Many companies implement it during their initial setup or before their first external investment round.
What are the different types of Stock Agreement?
- Phantom Shares Agreement: Creates virtual stock ownership rights without actual share transfer, ideal for employee incentives
- Share Vesting Agreement: Gradually grants shares over time, commonly used for startup founders and key employees
- Share Buyback Agreement: Allows companies to repurchase their own shares from shareholders
- Profit Split Agreement: Structures how profits are distributed among shareholders
- Sale Of Shares Contract: Governs direct share transfers between parties, including terms and conditions
Who should typically use a Stock Agreement?
- Company Directors and Board Members: Responsible for approving Stock Agreements and ensuring they align with Dutch corporate governance requirements
- Shareholders: Both existing and incoming shareholders who need to understand and comply with share transfer restrictions and rights
- Corporate Lawyers: Draft and review agreements to ensure compliance with Dutch law and protect client interests
- Investment Managers: Negotiate terms when representing venture capital firms or institutional investors
- Company Secretaries: Maintain records and ensure proper execution of share-related documentation
- Employee Participants: Staff members receiving shares through employee participation schemes or stock option plans
How do you write a Stock Agreement?
- Company Details: Gather current articles of association, shareholder register, and corporate structure documents
- Share Information: Document existing share classes, values, and rights under Dutch law
- Stakeholder Data: Collect details of all parties involved, including legal names and registration numbers
- Transfer Terms: Define precise conditions for share transfers, including pricing mechanisms and restrictions
- Voting Rights: Specify decision-making procedures and majority requirements
- Exit Provisions: Plan for scenarios like company sale or shareholder departure
- Template Selection: Use our platform's Dutch-law compliant templates to ensure all mandatory elements are included
What should be included in a Stock Agreement?
- Party Details: Full legal names, addresses, and registration numbers of all shareholders and the company
- Share Specifications: Detailed description of share types, quantities, and nominal values
- Transfer Mechanisms: Clear procedures for share transfers, including right of first refusal
- Voting Rights: Specific voting powers and decision-making thresholds
- Drag-Along Rights: Terms forcing minority shareholders to join in company sale
- Tag-Along Rights: Protection allowing minorities to join majority sales
- Dispute Resolution: Dutch court jurisdiction and applicable law provisions
- Exit Provisions: Clear procedures for shareholder departure or company sale
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 scope and purpose under Dutch law. While both deal with company shares, they serve distinct functions in corporate governance and equity management.
- Timing of Rights: Stock Agreements create immediate share ownership, while Stock Option Agreements grant the right to purchase shares in the future
- Legal Status: Stock Agreements transfer actual ownership rights and voting powers immediately, whereas Option Agreements only create a conditional promise of future ownership
- Risk Profile: Stock Agreement holders face immediate market risks and benefits as shareholders; Option holders delay both risk and reward until exercise
- Governance Rights: Stock Agreements typically include immediate voting and dividend rights; Option holders gain these only after exercising their options
- Tax Treatment: Under Dutch tax law, Stock Agreements trigger immediate tax implications, while Options often defer taxation until exercise
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