|Secured bond/note/financial instrument|
An ownership interest representing a portion of a company's capital which entitles its holder to both membership rights (e.g. voting rights) and economic rights (e.g. the right to share in the company's profits).
There are three main types of shares:
(1) ordinary shares (common stock), whose holders share in the company's earnings, if any, and vote at the general meeting of shareholders;
|Share Purchase Agreement||
An agreement pursuant to which a shareholder sells all or some of its shares. A share purchase agreement will typically contain a precise description of the parties involved and the shares to be sold, representations and warranties by the seller, an indication of the governing law, and dispute resolution mechanisms. The parties may opt for an asset purchase agreement if only a specific asset or branch of activity is to be acquired.
Stock options are often issued by start-ups in the early (seed) stage of their development or by companies later in their lifecycle in order to form ties with individuals with certain skills, allowing them to share in a potential value increase without having to burn seed capital by paying (substantial) cash compensation.
|Stock option/warrant plan|