A Subscription Agreement is a legal document that outlines the terms and conditions for an individual or entity to purchase shares in a company. It is typically used by private companies that are raising capital through the sale of shares to investors.The subscription agreement will include information about the company, such as its business plan, financial statements, and management team. It will also include details about the shares being offered for sale, including the number of shares, the price per share, and any restrictions on the shares (such as lock-up periods or transferability restrictions).The agreement will also include representations and warranties made by the company and the investor, which are statements of fact that each party is making to the other as part of the agreement. Representations and warranties are typically included to protect both parties in the event that any of the information provided in the agreement is inaccurate or incomplete.The subscription agreement will also include conditions that must be met before the shares can be sold, such as the completion of due diligence by the investor or the receipt of regulatory approvals.It is also important to note that, Subscription agreements are legally binding documents and should be reviewed by legal counsel before signing. The terms and conditions of the agreement will vary depending on the company, the type of shares being offered, and the jurisdiction in which the company is incorporated.In addition to the above, the subscription agreement also has to comply with the rules and regulations of the country where the company is incorporated and the securities laws of the country where the shares are offered for sale. The SEC in the US has a specific set of rules and regulations for private securities offerings and subscription agreements have to comply with these rules.
