A share subscription agreement (Share Subscription Agreement) is a promise by a company with existing shareholders (Company), to issue and allot a number of shares at a certain price to a subscriber (Subscriber), in return for the Subscriber promising to advance funds to the Company in an agreed number of “tranches”. A term sheet (Term Sheet) is a document that sets out the commercial terms and conditions under which a Share Subscription Agreement will be entered into. A Term Sheet is generally not intended to create legal relations between the parties, but rather to form the basis of further discussions, which may be exclusive for a period of time and on a strictly confidential basis. [Read more…]
share subscription
Term Sheets and Share Subscription Agreements
12 December 2017 by Dundas Lawyers
Filed Under: Commercial Law, Legal Articles Tagged With: share subscription, term sheet
What is a Share Subscription Agreement?
23 September 2016 by Dundas Lawyers

A share subscription agreement (Share Subscription Agreement) is a promise by a potential shareholder, also known as a subscriber, to make payment of funds to a company (Company) in an agreed number of “tranches”, in return for the Company issuing and allotting a certain number of shares at a certain price, such that the subscriber becomes a shareholder (Shareholder). A Share Subscription Agreement must include the number of shares that will be issued to the Shareholder, and the order and timing by which funds will be advanced. Sometimes it seems that a Share Subscription Agreement merely sets out the provisions of a term sheet (Term Sheet) in a fuller and more precise manner. [Read more…]
Filed Under: Corporate Law, Legal Articles Tagged With: Capital raising, share subscription, shares