Share subscription letter
Letter from a subscriber to subscribe for the allotment of new shares for cash in a private limited company
A subscriber who wishes to subscribe for new shares should apply in writing to the company.
What does a company need to consider before issuing new shares?
Before the shares can be allotted by the company, the following matters need to be checked and, if necessary, documented:
- that the directors have necessary authority to allot shares
- whether pre-emption rights on the issue of shares applicable to the company need to be waived or disapplied. Pre-emption rights may arise under one or more of the Companies Act 2006, the company’s Articles of Association and, if applicable, the company’s Shareholders Agreement
- whether the subscriber is required to become bound by the company’s Shareholders Agreement
About this subscription letter
This form of subscription assumes that the company and the subscriber have agreed the amount which the subscriber will pay for the new shares and the number of new shares to be issued.
The amount per share agreed to be paid by the subscriber should be not less than the nominal value of the relevant class of share. The amount can be more than the nominal value, with the excess over the nominal value comprising an issue at a premium.
Alternative forms of subscription letter, depending on whether the subscriber for the new shares is an individual or a company
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