Free Share Subscription Agreement Generator

Use this free share subscription agreement template to manage the legal aspect of issuing new shares in your company. This is a common way for companies to raise funds from investors – the investors ‘subscribe’ (i.e. pay) for new shares in the company.

This Share Subscription Agreement is Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) compliant. Generate your free agreement here.

Create your Free Share Subscription Agreement

Fill in the form below to have our free Share Subscription Agreement template emailed to you. No credit card, sign-up or subscription needed.

Where the investor is a company, enter the company's name, where the investor is an individual, enter the individual's name.

This is the number that can be found on Companies House or the Certificate of Incorporation.

Enter the amount the investor is paying for the shares, include the currency (e.g. GBP 500,000).

Enter the class of shares that are being purchased. Where SEIS/EIS relief is being sought on this investment, this is generally expected to be ordinary shares.

Include the currency - e.g. GBP 0.01

Include the currency - e.g. GBP 10.

Enter the date the investment is expected to take place. Under the agreement, the parties can mutually agree to transfer the investment monies in advance of this date if so desired.

Enter the email address you want us to send your contract to. This may take a couple of minutes to arrive.

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Guide to Share Subscription Agreements

What is a Share Subscription Agreement

A Share Subscription Agreement is a vital document between a company and its investors, detailing the purchase of shares at a predetermined price. It’s the cornerstone of raising capital, encapsulating terms and conditions that protect both the company and the investors. This agreement specifies the number of shares to be issued, the price, payment method, and any warranties or representations by the company. Having a clear, comprehensive agreement in place is essential for delineating the rights and obligations of each party, minimizing potential disputes. A well-drafted Share Subscription Agreement not only ensures legal clarity but also builds investor confidence by showcasing the company’s commitment to transparency and governance.

How to Ensure Share Subscription Agreements are SEIS/EIS Compliant

Share Subscription Agreements (SSAs) can be designed to be compliant with the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) in the UK, provided they meet certain conditions set out by HM Revenue and Customs (HMRC). SEIS and EIS are UK government schemes designed to help small, early-stage companies raise equity finance by offering tax reliefs to individual investors who purchase new shares in those companies.

For an SSA to be SEIS or EIS compliant, it needs to ensure:

  1. Eligibility of the Company: The company issuing shares must meet the specific criteria for SEIS or EIS. This includes, but is not limited to, being a trading company with a permanent establishment in the UK, not listed on a recognized stock exchange at the time of the share issue, and operating in an eligible trade.
  2. Eligibility of the Shares: The shares issued under the SSA must be ordinary shares, fully paid, and not carry any preferential rights to dividends, assets in the event of a winding up, or be redeemable.
  3. Use of Funds: The funds raised by the share issue must be used for a qualifying business activity. There are specific rules about how the money must be used and within what timeframe it should be employed in the business.
  4. Investor Eligibility: Investors seeking to avail of SEIS or EIS tax reliefs must meet certain conditions, such as not being connected with the company (e.g., owning more than 30% of the company’s shares or being an employee or a director).
  5. Compliance Period: The company must continue to meet the conditions of the schemes for a minimum period after the shares have been issued (three years for SEIS and EIS).

It is important for companies to ensure their SSAs are drafted to comply with the requirements of SEIS and EIS, as failure to do so could result in the company or the investors losing the associated tax reliefs. Companies often seek legal advice to ensure their SSAs and the terms of the share issue are compliant with the schemes’ regulations.

Additionally, after issuing shares, companies must apply to HMRC for SEIS or EIS compliance, which involves submitting detailed information about the company, the share issue, and how the funds will be used. HMRC will then issue a compliance certificate if the company meets the requirements, which investors need to claim their tax reliefs.

Given the complexity and the need for precision in compliance, consultation with a legal expert or a tax advisor who specializes in SEIS and EIS is highly recommended to ensure that the Share Subscription Agreements and the associated processes are fully compliant.

Importance of a Solid Share Subscription Agreement

A robust Share Subscription Agreement is more than just a legal requirement; it’s a foundational element of your company’s financial strategy. It protects the company’s interests by clearly outlining the terms of the investment, mitigates risks through comprehensive clauses on representations and warranties, and ensures compliance with relevant laws and schemes like SEIS/EIS. Furthermore, such an agreement can act as a tool for attracting high-caliber investors, who often look for clear, professional, and fair terms as indicators of a company’s potential. Investing time and resources into crafting a solid agreement can pay dividends in the form of smooth capital raising rounds and long-term investor relationships.

Implementing Your Share Subscription Agreement

Implementing a Share Subscription Agreement requires meticulous attention to detail and adherence to legal formalities. After drafting the agreement—ideally with the assistance of a template generator and legal counsel—it must be presented to potential investors for review. Negotiations may ensue, necessitating adjustments to the agreement. Once finalized, the agreement should be executed properly by all parties, with shares issued in accordance with the agreed terms. Companies should also ensure that all records are accurately updated and that compliance with SEIS/EIS, where applicable, is maintained. Regular reviews of the agreement are advisable to address any changing circumstances or legal requirements, ensuring its ongoing efficacy and compliance.

Navigating the complexities of share subscription agreements, particularly within the regulatory framework of SEIS/EIS in England and Wales, can be daunting. However, with a comprehensive understanding of the basics, alternative issuance methods, compliance strategies, and the importance of a well-structured agreement, businesses can confidently approach capital raising. Utilizing a free Share Subscription Agreement Template Generator that is SEIS/EIS compliant can offer a solid foundation, streamlining the drafting process while ensuring adherence to critical legal requirements. As companies implement these agreements, the focus on meticulous drafting, negotiation, and legal compliance cannot be overstated. By prioritizing these elements, businesses can secure the investment they need while fostering strong, compliant, and mutually beneficial relationships with their investors.

Quick steps:

  • create the share subscription agreement above, by entering the details of the investor, the company, and the details of the investment
  • make sure the company and investor agree to the terms
  • have the investor sign the letter / agreement
  • have the investor send the letter / agreement to the company, and also transfer the money to the company on or before the investment date
  • have the company issue the investor with share certificates

Get assistance from a lawyer if you want someone to manage this process on your behalf (recommended).

Legal help

Need the help of an expert lawyer with this or something else? We can help.

For example, the lawyer can essentially manage this whole investment process for you.

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