Share subscription agreement information
The investor may make several payments to the company over a defined period (known as ‘tranches’) or a lump sum payment for the shares.
When the agreement is concluded, the investor becomes a shareholder of the company and has the associated rights and liabilities.
The agreement may set out conditions precedent, including, for example, that the directors must pass a resolution approving the issue of shares before the agreement can come into force.
The agreement may also specify limitations on one or both parties, including a duty of confidentiality or a duty on the investor to refrain from investing in businesses that are in competition with the activities of the company.
If you are considering offering shares or investing in a company, it is important to seek legal advice before entering into an agreement. At Lawbase, we can assist in the creation of customised share subscription agreements to suit all sizes and types of company.
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