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Term Sheet

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Term Sheet

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How It Works

Document How It Works

TERM SHEET

A term sheet is a generally non-binding agreement that captures the basic terms and conditions of an investment.

 

The term sheet serves as a template and basis for more detailed, legally binding documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is drawn up.

Contents of Term Sheet

The following clauses form part of a well drafted Term Sheet:-

  • Name of the company in which the investment is being made

  • Type of security to be issued

  • Conversation rate of convertible securities

  • Veto rights

  • Founder’s lock-in

  • Drag along

  • Tag along

  • Right of first refusal (ROFR)

  • Right of first offer (ROFO)

  • Reps & Warranties

  • Exit rights

  • Governing law an

  • d Dispute Resolution 

Laws governing Term Sheet in India

The different laws which govern various aspects of Term Sheet in India are as follows:

  • Companies Act, 2013 and various rules framed thereunder
  • The Indian Contract Act, 1872
  • Foreign Exchange Management Act, 1999
  • Consolidated FDI Policy, 2020
  • RBI Policies
  • Competition Act, 2002
  • SEBI Guidelines (in case of listed company)

Why LegalKart?

  • Senior Corporate Expert Lawyers: We will get your document drafted/reviewed by Senior Expert Corporate lawyers. You can track the progress of your document on our platform at all times.
  • 4.5 Customer Score: Clients are delighted with our service! They have consistently rated us high because of our focus on delivering quality output and providing regular updates.
  • Responsible Delivery: Our team of experienced business advisors are just a phone call away. Our team will ensure that your interaction with the expert lawyer is smooth and seamless and the document draft is delivered to you within the committed timeline.

Deliverables

Our standard deliverables for every document drafting includes:

  • 60 Minutes of Talk-Time with the Lawyer for drafting/reviewing the Agreement
  • First draft of the documents will be delivered to you within a maximum of 2 working days
  • Post-delivery of the first draft – Iterations in the master Document to incorporate your suggestions/changes

Startup Documents

Term Sheet

₹3999

₹ 7999 (50% Off) ₹4000 Save

Gross Total

₹3999

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Frequently Asked Question

Who prepares and presents the Term Sheet?

Usually, it is the investor who presents the Term Sheet to the founders of the investee company.

Is Term Sheet always non-binding?

A Term Sheet is usually non-binding document by the very nature of it. With that being said, nothing stops the parties from entering into a binding Term Sheet.

 

In fact, a few clauses of the Term Sheet, such as governing law and dispute resolution, NDA, etc. are usually kept binding.

How is Term Sheet used?

A term sheet is an agreement that is executed between the prospective investor and the company.

 

It is usually entered into before the process of due diligence begins and it lays a foundation on which the more definitive documents, such as Share Subscription and Shareholder's Agreement are prepared at a later stage.

What happens after the parties have executed Term Sheet?

After the parties have executed the Term Sheet, the lenghty and crucial process of due diligence follows on the investee company, and afterwards, the parties enter into more definitive documents, such as Shareholder's Agreement, to give legal and binding effect to the investment.

Is it mandatory to enter into a Term Sheet?

No. It is not mandatory to enter into a Term Sheet.

 

However, most investors and founders prefer to enter into a Term Sheet that lays out the foundation of the major terms, upon which the definitive documents are later prepared.

What our users have to say

4.4 LegalKart reviews and ratings
Term Sheet

LegalKart reviews and ratings LegalKart reviews and ratings LegalKart reviews and ratings LegalKart reviews and ratings LegalKart reviews and ratings 4.4 / 5 ( 122 Reviews)
People purchased

256 People purchased

Startup Documents

Term Sheet

₹3999

₹ 7999 (50% Off) ₹4000 Save

Gross Total

₹3999

We Accept

LegalKart Payment Gateways