• How does one legally address vesting of shares for partners

Hi,
  Three partners are looking to incorporate a private limited company. We are going with an authorized capital of 10,000 shares of Rs 10 each. Out of this we want 4000 shares to be vested immediately split between all 3 partners. We want the rest of the 6000 shares to vest over the next 4 years equally between all 3 partners. Currently the draft of the Memorondum of Association has 10,000 shares as authorized capital and total number of suscribed shares as 4000 split equally between the partners. Where do we put the verbiage around the rest of the 6000 shares and the plan to have it vest over the next 4 years for all 3 partners. Should this go in the Memorundum of Association or the Article of Association? I want to ensure this can not be changed later. The lawyer tells us we can only address this piece (rest of the 6000 shares) after incorporation. Is this true?I would rather it be handled now as a part of the incorporation documents. Please advice on the best way to handle this so it is legally binding and can not be altered later.
Asked 10 months ago in Business Law from Mumbai, Maharashtra
Vesting is a contract clause which schedules a gradual acquisition of stock by a founder, usually to secure his dedication to the company for a certain period.

2) vesting of larger quantity of shares can occur at later period of time 

3)founders agreement can be entered into between the partners  outlining mutual understanding and setting out expectations of each party streamlining investment and distribution of money and highlighting roles, responsibilities and obligations of each party 
Ajay Sethi
Advocate, Mumbai
32360 Answers
1786 Consultations

5.0 on 5.0

vesting  needs to be outlined in founders agreement 

2) the founder agreement needs to reduced in writing and be duly stamped to avoid legal complications in future 

3) you can incorporate an arbitration clause in the founder agreement for resolution of disputes 
Ajay Sethi
Advocate, Mumbai
32360 Answers
1786 Consultations

5.0 on 5.0

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