Startups and smaller companies often have subscription agreements. Business owners use them when they can’t afford to go public but want to attract venture capital investments.
The share subscriber agreement sets forth the conditions on which a private investor can purchase the shares.
A person may become a stockholder in several ways. A means to do this can include a shareholder agreeing to purchase shares from the firm at a certain subscription price. This arrangement is usually further formalized using terms sheets.
This subscription agreement template from Fill includes all the necessary provisions required for a successful and legally binding transaction. It also outlines the rights and obligations of both company and the subscriber, including the number of shares, payment terms, and representations and warranties.
By downloading this template, you can save time drafting your own subscription agreement from scratch and ensure that it covers all important aspects of the transaction. Additionally, you can easily customize the template to fit your specific needs. Download now to secure our sample subscription agreement.
Subscription agreements can vary by company size, needs, sector, and many more. This downloadable contract provided by Fill is a commonly used stock subscription agreement where a private entity agrees to buy stocks from the company at a set subscription price based on share units.
While subscription agreements work for most companies, they are not compulsory. Nevertheless, this document can be beneficial for anyone who agrees to buy a share of an organization in clear terms.
This document can also be useful for taxation purposes. Often subscription agreements are relatively brief or sometimes contain limited detail, without the need to register with the US Securities and Exchange Commission, such as when a company sells stocks to raise capital from venture capital entities. In some cases, however, more formal subscriber agreements are used.
While this document can be customized to become legally binding, it’s still best to get legal advice when drafting a subscription agreement. When you combine investment experience and legal experience, you can create powerful contracts protecting the legal rights of the business and the subscriber. It may be helpful to protect your investments and prepare the agreement, as well as foresee any potential disputes.
When designing a subscription agreement, don’t forget to include the following:
This is the final section of the subscription agreement where both parties are required to sign the document to make it legally binding.
Share subscription agreements are basically a contract for acquiring shares by companies. By contrast, shareholders agreements provide rules for the long-term relationship between shareholders.
A subscription agreement must be negotiated along with an investment agreement, where the subscriber acknowledges their role as an investor in the company, while a shareholder agreement covers the relationship between existing shareholders.
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