When you’re raising capital for your company, signing on new investors you issue shares in your corporation or units in your LLC to those new investors/business partners, The purchase of those shares/units needs to be documented in the proper contract called a subscription agreement. A subscription agreement provides the details of the purchase price for the security (the shares/units). It also includes the representation and warranties that each party will make to each other as part of the agreement. A subscription agreement is a formal agreement between a company and an investor to buy shares of a company at an agreed-upon price. A well organized and well-structured subscription agreement will include the details about the transaction, the number of shares being sold and the price per share, and any legally binding confidentiality agreements and clauses.
Use this sample subscription agreement as a guide, but keep in mind that not all investors are created equal, some have special needs or requirements, and depending on the amount of money you’re raising you may need to consult an attorney to ensure you’re complying with both state and federal laws and regulations.
Subscription (Purchase) Agreement – Short Form
