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A Subscription Agreement outlines the terms and conditions when investors purchase shares or securities in a company. It's a crucial legal contract that binds both the company issuing securities and the investors buying them, commonly used in private placements and IPOs across Indian markets.

Under SEBI guidelines, this agreement spells out key details like share price, number of units, payment terms, and investor rights. It also includes important representations and warranties from both parties, making it essential for startups raising capital and established companies expanding their shareholder base. The agreement helps protect all parties and ensures compliance with Indian securities laws.

Use a Subscription Agreement when raising capital through share offerings, particularly during startup funding rounds or private placements. This agreement becomes essential once you've identified potential investors and need to formalize the terms of their investment in your company.

The timing often aligns with key business growth stages: initial seed funding, Series A rounds, or when expanding operations needs fresh capital. Under Indian company law and SEBI regulations, having this agreement in place protects both parties by clearly documenting share pricing, payment schedules, and investor rights before any money changes hands. It's especially important for startups engaging with venture capital firms or angel investors.

• Fund Subscription Agreement: Used for mutual fund investments and regulated investment schemes, detailing unit allocation and fund-specific terms.
• Shareholder Subscription Agreement: Standard format for direct company share purchases, covering voting rights and dividend provisions.
• Convertible Note Subscription Agreement: Combines debt and equity features, allowing future conversion of investment into shares.
• Advance Subscription Agreement: For future share allocations, commonly used in seed funding rounds.
• Software As A Service Subscription Agreement: Specialized version for SaaS products, focusing on service access and usage terms.

• Companies and Startups: Issue shares and raise capital through Subscription Agreements, with board approval needed for execution.
• Individual Investors: Subscribe to shares, including retail investors in private placements and HNIs seeking equity stakes.
• Venture Capital Firms: Use these agreements when investing in growth-stage companies, often adding specific terms and conditions.
• Legal Counsel: Draft and review agreements to ensure compliance with Companies Act and SEBI guidelines.
• Company Secretaries: Handle documentation, filing requirements, and maintain statutory records related to share subscriptions.
• Investment Bankers: Structure deals and coordinate between companies and potential investors during fundraising rounds.

• Company Details: Gather complete corporate information, including CIN, registered office, and authorized share capital.
• Investment Terms: Document share price, number of shares, payment schedule, and any special rights or restrictions.
• Board Approval: Secure necessary board resolutions authorizing the share issuance.
• Investor Information: Collect KYC documents, PAN details, and bank account information for share allotment.
• Compliance Check: Verify alignment with Companies Act requirements and SEBI guidelines.
• Documentation: Our platform generates legally-sound Subscription Agreements tailored to your specific needs.
• Review Process: Double-check all terms, representations, and warranties before finalizing.

• Parties and Recitals: Complete details of the company and subscribers, including registration numbers and addresses.
• Share Details: Precise description of shares, including class, price, and total subscription amount.
• Payment Terms: Clear schedule of payments, including application money and call money provisions.
• Representations: Company's authority to issue shares and subscriber's capacity to invest.
• Rights and Obligations: Detailed investor rights, voting powers, and transfer restrictions.
• Compliance Declarations: Statements ensuring adherence to Companies Act and SEBI regulations.
• Governing Law: Indian jurisdiction and dispute resolution mechanisms.
• Execution Block: Proper signature spaces with witness provisions as required by law.

A Subscription Agreement differs significantly from a Bond Purchase Agreement. While both involve investment transactions, they serve distinct purposes in Indian financial markets.

• Nature of Investment: Subscription Agreements deal with equity shares, offering ownership stakes and potential voting rights. Bond Purchase Agreements focus on debt instruments with fixed returns and maturity dates.
• Risk Profile: Share subscribers take on company ownership risks and potential upside, while bond purchasers receive predetermined interest payments with priority in repayment.
• Regulatory Framework: Share subscriptions fall under Companies Act and SEBI equity regulations, whereas bonds follow debt market rules and RBI guidelines.
• Duration and Exit: Share subscriptions typically involve long-term ownership without fixed exit dates. Bond purchases have defined maturity periods and redemption terms.
• Rights Conveyed: Subscription Agreements may include shareholder rights and corporate governance provisions. Bond agreements focus on interest payments and security terms.