Why this is important Our deed aims to give company directors and officers important rights to be indemnified (that is, the company reimburses them for certain liabilities and expenses they incur), to be insured, and to access important documents (including those they may need to access in order to challenge proceedings brought against them). An important feature of the document is that it provides protection even after the person is no longer a director or officer. This is to address the fact that the risks continue after one stops being a director or officer. Quality people should insist If you are contemplating joining a company as a director or officer, you should insist on securing these rights from the very beginning, as they provide you with very important (and common) protections. See also the note below about timing with respect to investors. Attract quality people A company that grants these important (and common) rights to its directors and officers is more likely to attract quality people to its cause. Timing is important - especially for founders and pioneers It is usually easier to implement this arrangement before outside investors are introduced into the company. A deed of this nature will not usually be a reason for an investor to avoid investing in a company (as they are common), but it can be more difficult to get one implemented after new investors come on board and the decision making dynamics change. For these reasons, it is usually a good idea for founders and officers to get this sorted early, so they can lock away the protection offered by the document from the outset, and knowing that the clauses aim to apply long after the founder/officer has ended (whether voluntarily or involuntarily) their formal role with the venture they helped develop. Get in touch Please email us at indemnitydeed@saljar or call us on 1300 882 643 to discuss whether you need this deed and whether our document is right for you. Were happy to discuss this at no cost to you, so dont hesitate to get in touch.
Posted on: Mon, 12 Jan 2015 02:06:38 +0000
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