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Stock Subscription Agreement for Philippines

Stock Subscription Agreement Template for Philippines

A comprehensive legal agreement governed by Philippine law that formalizes the subscription of shares in a corporation. The document outlines the terms and conditions under which an investor agrees to purchase newly issued shares, including the number and class of shares, purchase price, payment terms, and the rights and obligations of both the corporation and the subscriber. It ensures compliance with the Revised Corporation Code of the Philippines and Securities Regulation Code, incorporating necessary representations, warranties, and conditions for the share issuance.

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What is a Stock Subscription Agreement?

The Stock Subscription Agreement is a fundamental document used in Philippine corporate practice when a corporation issues new shares to investors. It serves as the primary legal instrument for documenting share subscriptions, whether for initial capitalization, additional capital raising, or bringing in new investors. The agreement must comply with the Revised Corporation Code of the Philippines, particularly regarding minimum subscription and paid-up capital requirements. It typically includes detailed provisions on share pricing, payment terms, representations and warranties, and may need to address foreign ownership restrictions if applicable. The document is essential for both private and public companies and must be properly executed to ensure valid share issuance and protect both the corporation's and subscribers' interests.

What sections should be included in a Stock Subscription Agreement?

1. Parties: Identification of the Corporation and the Subscriber(s)

2. Background: Context of the subscription, including corporate authority and capital structure

3. Definitions: Key terms used throughout the agreement

4. Subscription: Number, class, and par value of shares being subscribed to

5. Subscription Price: Total consideration and price per share

6. Payment Terms: Schedule and method of payment for the subscribed shares

7. Representations and Warranties of the Corporation: Corporate authority, valid issuance, compliance with laws

8. Representations and Warranties of the Subscriber: Capacity, financial ability, compliance with laws

9. Issuance of Shares: Process and timing for share issuance upon payment

10. Rights and Obligations: Subscriber's rights and responsibilities as a shareholder

11. Governing Law: Philippine law as governing law

12. Dispute Resolution: Process for resolving disputes

13. Notices: Method and addresses for formal communications

14. General Provisions: Standard boilerplate provisions including amendment, assignment, severability

What sections are optional to include in a Stock Subscription Agreement?

1. Foreign Ownership Compliance: Required when subscriber is foreign, addressing nationality restrictions

2. Right of First Refusal: Optional provisions giving existing shareholders first right to purchase shares

3. Tag-Along Rights: Optional protection allowing minority shareholders to join in sale of shares

4. Drag-Along Rights: Optional provision allowing majority shareholders to force minority participation in sale

5. Board Seat Rights: Optional provision granting right to board representation based on shareholding

6. Anti-Dilution Protection: Optional protection against future share issuances at lower prices

7. Lock-up Period: Optional restriction on transfer of shares for a specified period

8. Conditions Precedent: Required when subscription is subject to specific conditions being met

9. Regulatory Compliance: Required when specific regulatory approvals are needed

What schedules should be included in a Stock Subscription Agreement?

1. Schedule A - Details of Share Subscription: Detailed breakdown of share class, number, and price

2. Schedule B - Payment Schedule: Detailed payment terms and installment schedule if applicable

3. Schedule C - Corporate Information: Details of corporation's capital structure and existing shareholders

4. Schedule D - Subscriber Information: Detailed information about the subscriber including KYC documents

5. Schedule E - Representations and Warranties: Detailed list of representations and warranties

6. Appendix 1 - Board Resolution: Copy of board resolution approving share issuance

7. Appendix 2 - Shareholder Resolution: Copy of shareholder resolution if required

8. Appendix 3 - Certificate of Incorporation: Copy of corporation's registration documents

9. Appendix 4 - Articles of Incorporation: Copy of corporation's articles of incorporation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions










Clauses



































Relevant Industries

Financial Services

Technology

Real Estate

Manufacturing

Retail

Healthcare

Energy

Mining

Agriculture

Transportation

Telecommunications

Education

Construction

Professional Services

Entertainment

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Treasury

Investment

Risk Management

Corporate Development

Board of Directors

Executive Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Secretary

Legal Counsel

Investment Manager

Corporate Lawyer

Compliance Officer

Finance Director

Investment Banker

Private Equity Manager

Venture Capitalist

Board Director

Company Director

Treasury Manager

Risk Manager

Corporate Finance Manager

Industries







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