A pre-emption waiver for a funding round should describe precisely what the shareholders agree to waive. Identify the shares, investor, terms and conditions, and check where the relevant rights arise. A broad sentence saying “we approve the investment” may not answer those questions.
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Review the company’s actual constitution and shareholders’ agreements. ACRA’s constitution guidance explains that the constitution sets the company’s governing rules and rights. Do not assume every company has identical pre-emption provisions.
Locate the right before drafting the waiver
Identify the applicable issue or transfer provision and the parties entitled to rely on it. A right concerning newly issued shares can differ from a right concerning a sale of existing shares. Read the definitions, exceptions and required consent process.
Give legal advisers the current executed documents and amendments. An older template may contain a provision the company never adopted.
Example: one investor is approved, another is added
Shareholders sign a waiver for an issue to a named investor. Before completion, the company adds a second investor or changes the share class. Review whether the original waiver covers the revised transaction rather than assuming any fundraising within the same month is included.
Make the proposed scope clear
- The company and shareholders giving the waiver.
- The provision or right being addressed.
- The particular issue or transfer.
- Share class, number, consideration and investor.
- Conditions, timing and material changes requiring review.
- Other rights expressly preserved where appropriate.
The drafting should follow the actual agreement and legal advice. Do not copy a waiver from another transaction without checking whether its parties and rights are comparable.
Keep the corporate approvals separate
A contractual waiver does not automatically constitute every required corporate approval. The company secretary should review the issue or transfer process alongside the waiver. ACRA’s allotment instructions address the relevant shareholder approval and filing steps.
Ensure each document has the right purpose. A consent resolving one shareholder’s contractual right should not be presented as though it also completes the statutory filing.
Check execution and version control
Record who signed, in what capacity and which version was signed. If a shareholder is a company, review the authority for its signatory. Keep attachments and schedules together with the signed document.
Do not merge signatures from different drafts into an apparently final agreement. If terms changed, obtain advice on whether fresh signatures or consent are required.
Review changes before completion
Compare the final subscription terms with the waiver. Escalate differences in investor, price, class, number or other material conditions. Preserve the original waiver and any subsequent clarification or amendment.
After completion, index the waiver with the approvals, transaction documents and official filing records. A later fundraising team should be able to tell whether it was a one-off waiver or a broader agreed change.
Does a waiver remove pre-emption rights for future rounds?
That depends on the actual wording and applicable documents. Do not infer a permanent change from a transaction-specific consent.
Can one shareholder waive everyone’s rights?
Identify the right holders and required process. Obtain advice rather than assuming authority.
Related shareholder and governance guidance
Read about company constitutions, shareholders’ agreement clauses and deeds of adherence.
Get help with the transaction documents
For corporate records and transaction coordination, email [email protected] or WhatsApp +65 8501 7133. Where drafting, contractual interpretation or dispute advice is required, legal advisers from our associated law firms can assist.