Document background
A Preference Shares Agreement is a crucial document used when a company wishes to raise capital without diluting voting control, while offering investors preferential rights to dividends and capital repayment. This agreement, governed by Indian law, particularly the Companies Act, 2013, and SEBI regulations, is commonly used in corporate fundraising, restructuring, and investment scenarios. The document outlines the complete framework for preference shares issuance, including dividend rights, redemption terms, conversion options (if applicable), and various protective provisions for both the issuing company and preference shareholders. It's particularly valuable when companies need to attract investors with assured returns while maintaining existing shareholder control structures.
