Investing in a company is one of the many dreams of the population. This is due to the fact that the amount being invested will bloom into bigger bags of opportunities and success. With this, companies use various legal forms for their private investors in order to lay the rules and regulations as well as the obligations accompanying the investments. One of the most common documents that companies use is known as a share subscription agreement form which is for detailing the shares and the investments of an individual for the company.

Blank Share Subscription Agreement Form

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What Is a Share Subscription Agreement Form?

A share subscription agreement form is a document that is essential for transacting a private investment. Along with the company’s business plan and financial statements, the investor must be presented with the agreement for him to be acknowledged as a legal part of the company. This is also a common sort of share offer form and serves as a documented promise of the company and the investor to sell and purchase specific shares at a particular price. The main purpose of having this agreement is to formalize and protect both parties, the investor, and the company toward dealing with conflict in the future especially if there are breaches and misunderstandings to arise within the period stated on the contract.

Common Shares Subscription Agreement Form

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When to Use a Share Subscription Agreement Form?

Although a share subscription agreement form is necessary for a successful investing transaction, the need for using this document depends on the preferences of the investor. With the aid of a subscription agreement request form, the investor will be able to inform the company that he is more assured if an agreement is laid out for the parties to sign onto. A formal letter can also be used as an alternative to the pre-made form which should indicate the requests of the investor and the details of his subscription. However, regardless of what will be used during the transaction, both parties must arrive at an agreement to sustain order and acknowledge responsibilities and duties.

Preferred Shares Subscription Agreement Form

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Contents of a Share Subscription Agreement Form

The contents of a share subscription agreement form are simple and concise. Below are the following:

  • Subscriber information – This is the first section of the form that focuses on gathering the general information of the subscriber. This section contains two separate areas that will determine whether the subscriber is an individual or a group. For individual subscribers, the personal subscriber area is the appropriate one to fill out with the subscriber’s legal name and identification number. The subscriber must also indicate if he is subscribing with a joint individual or with a common tenant in order to acknowledge the other party involved in the subscription. On the other hand, the corporate subscriber area will be for those who subscribe as a company and as an organization. This contains their company address, contact information, and the name of the company’s trustee.
  • Subscription information – This refers to the number of shares that the subscriber prefers to purchase from the company. The price of each share is also stated in this section along with the dividends whether the subscriber chooses a reinvestment or through quarterly cash. Additionally, how the subscriber pays for his purchased shares is also indicated in order to distinguish the payment method applicable for the varying shares in the company.
  • Subscription statement – “I hereby subscribe and purchase…” is the opening phrase for this legal statement. The purpose of including this in the form is to describe the intentions of the parties along with their agreed terms and conditions. In addition, it is also essential that the subscriber indicates in the statement that he, if an individual subscriber, is of legal age and has attained the capacity to conduct the purchase. For companies and corporations, the financial and the legal abilities of the group to purchase the shares should also be included in the statement.

Share Subscription Shareholders Agreement Form

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  • Bank information – This section is only for the usage of banks or the company who is selling the shares to the subscribers. The investor and share identification numbers, planner information, checker’s name, batch number, and the certificate date are some of the details to be stated.
  • Subscription acknowledgment – This is one of the essential sections of the form since it signifies that the parties have acknowledged the statements, facts, and the claims in the document which will then be used for binding the agreement. The subscriber must also disclose that he is not a debtor of the company or has not signed any other agreement forms that can hinder the legalization of the contract as well as meeting his obligations for the share subscription. Other inclusions in this acknowledgment are the requests of the subscriber to acquire specific certificate forms upon fulfilling the share’s payment within the agreement’s allotted time period.
  • Signature page and acceptance – Any type of agreement form must have the signatures of the parties who created the contract. With this section, the subscriber and the company will be able to state the identifications of their attorney-in-fact or representatives who will manage the transaction. At the bottom of the acceptance statement regarding the responsibilities of each party will be the signatures and the date of when the agreement has been successfully presented and complied.

Schedule forms also accompany this share subscription agreement. Specifically, the form is intended to lay out the risk acknowledgment of the company and the purchase exemptions in order to determine the limitations of the subscriber in using the recently purchased shares.

Subscription Agreement Form Sample

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Common Clauses in a Share Subscription Agreement Form

To define the duties and responsibilities of the parties, clauses in a share subscription agreement form are included. One of the most common clauses is a confidentiality agreement clause. This is intended to secure that the terms, conditions, transactions, and statements in the contract will be limited to the knowledge of the involved parties only. Next is the conditions precedent clause which is essential for indicating the specific acts and regulations to be observed and mandated before the agreement will begin as well as before any resolution or addendum will be incorporated in the contract. Another is a warranty and indemnity clause that will signify that the parties are both willing to cater the rules and obligations stated in the contract.

With this information, any company, organization, and individual who prefers to invest in a share will be able to conduct a flawless transaction. However, one thing to keep in mind for any subscriber is to secure that the terms have been presented to him along with the interpretations to assure that the agreement has met the expectations of the parties and that there are no hidden intents for the subscription.

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