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Shareholder Subscription Agreement



The board of directors of the company must authorize the issuance of shares (as always, there are exceptions, as discussed below). § 41 (2) of the law states that a particular decision of the shareholders of the company is necessary when the shares are issued to a shareholders` agreement – is probably one of the most complex and important agreements you will ever sign. It contains almost everything related to the company`s participation, including placement, share transfer restrictions, towing, non-competition, etc. Breaking the agreement can have serious consequences, make sure you understand. Sometimes these documents are put together into one large document (often called an investment contract), but, for the sake of clarity, they are normally separated. It is an exchange of promises between a potential shareholder known as a subscriber and a company. A share subscription agreement provides that the company agrees to sell a certain number of shares at a given time and price, so that the subscriber becomes a shareholder. In return, the subscriber agrees to buy the shares at a given time and at a certain price. Share subscription contracts are common in limited partnerships where the complement manages the entire partnership. To become a partner, you must meet the standard requirements of the share elected contract. In addition, a share subscription agreement contains insurance and guarantees from companies (and sometimes founders). These guarantees are in the interest of the investor – they essentially help him to know what he got into without having to carry out a great deal of due diligence himself.

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