Overview of a Deed of Adherence
What is a Deed of Adherence?
A Deed of Adherence is a document by which a person/entity becomes a party to an existing Shareholders’ Agreement.
A Deed of Adherence is used when a person/entity becomes a shareholder of a company (by subscribing new shares or by acquiring existing shares) where a Shareholders’ Agreement is already in place.
By executing a Deed of Adherence, the new shareholder becomes a party to the existing Shareholders’ Agreement, and is bound by all the terms of that agreement.
Key points included
- Identity (name and address) of the subject company, the shares of which are being subscribed/acquired;
- Details (parties and date) of the existing Shareholders’ Agreement; and
- Details (number, class, and purchase price) of the shares being subscribed/acquired.
