Subscription Agreement: established business single investor

Subscription Agreement: established business single investor

Subscription agreement for the investment in an established business by a single investor

Background

When use a separate Subscription Agreement?

Having a separate Investment/Subscription Agreement is likely to be more suitable for a company:

• which already has non-management shareholders or investors, perhaps as a result of a previous investment round
• which anticipates having future funding rounds

About this Subscription Agreement

This document is for the investment by a single investor in an established business carried on through a private limited company. It covers the investment terms for the subscription and includes warranties from the company and, if agreed, the founder shareholders.

In addition to this Subscription Agreement, the parties will likely require a shareholders agreement between the investor and the founders of the company which governs the relationship between the company and all of its shareholders going forward.

Document features

• subscription: the mechanism and terms for the subscription for shares by the investor
• completion: completion of the investment, including the issue of shares to the investor and payment by the investor
• warranties: warranties from the company and, if agreed, the founder shareholders. As the investment is in an established business, the warranties are in relatively full-form to reflect the trading history of the company and its subsidiaries
• limitations on liability: legal limitations on the potential liability under the warranties of the persons who have given the warranties

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