This article focuses on discussing the commonly used legal agreements in transactions, including transfers of ownership, acquisitions, sales of assets, and operations. These fundamental agreements are usually facilitated between the shareholders, stakeholders, investors, regulatory authorities, etc. Further, this article highlights how these agreements serve as essential tools for facilitating seamless business operations and fostering trust in the legal and commercial landscape. The agreements mentioned below are predominantly in the area of mergers, acquisitions, or joint ventures.

Preliminary Agreements

• Term Sheets
  Term Sheet is the first document detailing the proposed structure, and route of the legal transaction exchanged between the parties. Term Sheet is usually considered a pre-contract document, wherein one party sends the proposal formally, and then the discussion regarding the inclusions and exclusions of contract clauses, binding liabilities, deal type, investment amount, duration of the deal, etc. are negotiated and incorporated in the Term Sheet.
  
  The parties can mutually decide whether they want the Term Sheet to be binding or non-binding depending on the personal and professional relationship between the two parties. Term Sheet acts as supporting document to the final agreements as it contains all the necessary clauses which are negotiated and agreed upon by both the parties. Term Sheets are also commonly worded as a Memorandum of Understanding (MoU) or Letter of Intent (Loi) serving the same purpose.
   
• Non-Disclosure Agreements (NDAs)
  A Non-Disclosure Agreement (NDA) is one of the critical, standard, and significant agreements that is signed and executed even before the initiation of the transaction. NDAs are executed between all the parties involved in the transaction, to protect critical and commercially sensitive business information whose breach/leak could harm the party.
  
  When involved in the talks or discussion of a legal transaction, a substantial amount of information is exchanged between the parties including but not limited to the financials of the company, any internal legal disputes, outstanding debts, current valuation of assets, intellectual property portfolio, the number of assets owned by the company, number of clients and so on. NDAs are a primary governing document as to what should be disclosed and what information should not be meaning it has to be drafted precisely while maintaining a foresight on the future of the transaction as well.

Core Agreements

• Shareholder's Agreements
  When a legal entity is being incorporated, by the virtue of the investment of two or more persons then such agreements are needed to avoid potential disputes. Shareholders Agreement helps people regulate their rights in a company. These types of agreements dictate the prior agreed ownership structure, equity split, liabilities, and the regulations around the equity market. Stronger Shareholder agreements help a business lay down a resilient business.
  
  Shareholder Agreements have elaborated into two critical agreements among whom confusion is likely caused, Share Purchase Agreement (SPA) and Share Subscription Agreement (SSA). SPA regulates the buying and purchasing of shares. SSA mostly regulates the process of buying newly issued shares by the Company between the investor, buyer, and the company.
   
• Joint Venture Agreements;
  Joint Venture (JV) Agreements are executed when the two entities want to operate, sell, manufacture, etc., in collaboration vertically or horizontally and across borders to come together and set up a business. JV agreements help facilitate the split of the risk, profit, and loss along with liabilities as mutually decided between the parties. JV's agreements are further divided into two various categories, namely Incorporated JV where an entity is formed, named, and operated as per the local relevant jurisdiction. Secondly, there exists a contractual JV, wherein no legal entity is formed but all the functionalities like representations, warranties, profit, loss partition, etc. are all mentioned in one single agreement.
   
• Drag-Along and Tag-Along Agreements
  Drag-along rights which are vested when you own shares in a company. This agreement helps the majority shareholders of a company to sell the company to a third party without the consent of the minority shareholder. This agreement enables the majority shareholders to sell the company without any indecisiveness. Tag-along right as the name suggests, the tag-along agreement protects minority shareholders. This agreement empowers minority shareholders to sell their shares at the same price as the majority shareholder and not be exploited by them.
   
• Assets Purchase Agreement
  This Assets Purchase Agreement (APA) deals with the sale and purchase of assets while safeguarding the interests of both parties. APA's help the buyer to filter out all the particular assets he is interested in buying which is later followed by the seller transferring the ownership to the purchaser with legal protection. The assets involved in this APA type of transaction are mostly related to real estate, goodwill, licenses, machinery, manneristic goods, and intellectual property. Asset Purchase Agreements can be further customized into varied types of categories like Equipment/Inventory Purchase Agreements, Intellectual Property Purchase Agreements, and Business Purchase Agreements.

Supporting Agreements

• Non-Compete Agreements
  As parties standardize the structure of the legal transaction, the contracting power can dictate whether one of the parties to the contract can conduct a similar business after terminating the current agreement or restrain the employees of the other party from competing in a similar business line. and Non-Compete Agreement (NCA) helps in the execution of such. NCAs are executed primarily because the employees have the exposure to intellectual property, and the financials involved, and have a clear idea of managing and executing the business, business plans, etc. to stop them from competing in a similar business line.
  
  Although NCAs have been mostly scrutinized by quoting them as violating fundamental rights to business and trade. Although Section 27 of the Indian Contract Act (1872) does provide for the exception of non-compete under which such agreements would be legally valid provided that the restrictions for the party are reasonable, the restriction is time-bound and as well as geographically limited as well.
  
  In short, the person should be able to conduct the business with a fair amount of restriction, the person can compete in a similar line once the time limit restriction is over and can compete in other states or countries serving different clients. The language while drafting a NCA has to sound convincing and reasonable as any harsh clause could trigger a legal dispute.
   
• Escrow Agreements
  An Escrow Agreement is a three-way agreement executed between the parties involved in the legal transaction and the Escrow party. Escrow agreements to facilitate the smooth passing of ownership of assets and holding it till specific conditions are fulfilled. These financial agreements usually contain all the duties, and liabilities of both parties along with the banking details. The escrow party is the neutral party in the transaction, which allocates. releases the funds when all the pre-existing conditions of both parties are complied with. Any asset containing monetary value can be used in this Escrow Agreement like stock, bond, a company, institution, etc.
   
• Technology Transfer Agreements
  Technology Transfer Agreement governs the handover of tech, software, tools, etc., from one party to another. These agreements facilitate the transfer of ownership of a tech that is developed or owned by an entity to another entity for consideration or condition based on the transaction. These agreements not only facilitate the transfer of technology but also foster collaboration between two entities who could further improvise on the existing tech and its output along with generating the best value for the technology benefitting both the parties.