Adopt Autograph Subscription Agreement Template For Free

A subscription agreement is between a company and a private investor to sell a specific number of shares at a specific price. This investor fills out a form documenting his or her suitability for investing in the partnership. A subscription agreement can also be used to sell stock in a privately owned business.

A subscription can agreement include (but is not limited to): Capital commitment. Investor information needed for suitability determination, as well as regulatory and tax reporting reasons. Conditions precedent, representations, and warranties.

While both SSAs and SPAs involve the transfer of shares, the key difference lies in the nature of the shares being transferred. In an SSA, the company issues new shares to an investor, whereas in an SPA, a buyer purchases existing shares from a seller.

In many cases, a subscription agreement accompanies the memorandum. Some agreements outline a specific rate of return that will be paid to the investor, such as a particular percentage of company net income or lump sum payments. Also, the agreement will define the payment dates for these returns.

A shareholders' agreement (SHA) is a contract between a company's shareholders and often the company itself. A SHA specifies shareholders' rights and obligations, regulates the management of the company, ownership of shares, privileges, voting and various protective provisions for shareholders.

A share purchase agreement differs from a share subscription agreement because a share purchase agreement has a seller that is not the business itself. In a subscription agreement, the business agrees to sell shares to a subscriber.

A subscription agreement is often found at the end of any Offering Memorandum and is essentially the contract between the issuing company and the investor. The subscription agreement is a breakdown of a good part of the private placement document and once signed and paid for the investor becomes a 'subscriber'.

When an investor commits to funding the company, he enters into a Share Subscription and Shareholders Agreement with the founders and the company. Both agreements are often combined into one, and the abbreviation SHA is often used to refer to both the share subscription and the shareholders agreement.

The PPM goes into the specifics of the offering, whereas the Subscription Agreement acts as the purchase agreement to acquire interests in the offering. To learn more about PPMs, refer to this article: Private Placement Memorandum (PPM) overview.

A subscription agreement is an investor's application to join a limited partnership (LP). It is also a two-way guarantee between a company and a new shareholder (subscriber).