An Option Deed – also called a Call Option Deed – is useful when you’re giving a party the rights to, at their option, buy shares in a company.
It’s an agreement where a party gives the right to another party to purchase a certain amount of shares at a predetermined price.These shares can be either new shares granted by the company, or pre existing shares granted by a shareholder.
Option Deeds are often drafted with an expiration date, so that if a party does not purchase their shares by a certain date, their right to buy a set amount of shares at a set price lapses.
Option Deeds can be a great way to entice potential investors or to reward shareholders!
What’s Included In An Option Deed?
An Option Deed includes details such as:
- An agreed time for when the shares are granted
- Whether the shares will be granted based on reaching certain achievements
It’s important to speak with a lawyer before drafting an Option Deed to ensure that it properly reflects your business’ situation. Plus, a lawyer will make sure you are aware of any other documents – such as Shareholders Agreements – that may need to be updated as a result.
At Sprintlaw, we have experience with Option Deeds, capital raising, drafting Shareholders Agreements, and advising on other corporate and commercial related legal matters. Don’t hesitate to contact our friendly team at firstname.lastname@example.org or on 1800 730 617 for a free, no-obligations chat.
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