Question 1

What is a Subscription of Shares Agreement?

Accepted Answer

A Subscription of Shares Agreement is a contract between a company and an investor for the issue of new shares. Unlike a share sale (existing shares), a subscription involves the company creating and issuing new shares to the subscriber in exchange for investment capital.

Question 2

Is this template compliant with South African law?

Accepted Answer

Yes, this template complies with the Companies Act requirements for share issues, including proper authorization, consideration, and documentation. It addresses board and shareholder approval requirements where applicable.

Question 3

Can I customize this template?

Accepted Answer

Yes, the template includes a customization table to specify the number and class of shares, subscription price, payment terms, conditions precedent, and any special rights attached to the shares being issued.

Question 4

What key clauses are included in the template?

Accepted Answer

The template covers: share class and number; subscription price and payment terms; conditions precedent; representations and warranties; breach and remedy provisions; confidentiality; dispute resolution; and share certificate delivery.

Question 5

Who should use this template?

Accepted Answer

This template is suitable for companies raising capital through new share issues, whether from existing shareholders, new investors, or as part of funding rounds. It's commonly used in seed funding, Series A rounds, and private placements.

Question 6

What format is the template delivered in?

Accepted Answer

The template is delivered in Microsoft Word format (.docx), allowing the company and subscriber to negotiate and finalize terms before execution.

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Template Subscription of SharesAgreement