Document background
The Shareholders Agreement And Share Subscription Agreement is a fundamental document in South African corporate law, typically used when a company is seeking new investment while simultaneously establishing the framework for shareholder relationships. It's particularly relevant for private companies raising capital, whether through venture capital, private equity, or strategic investors. The document serves dual purposes: facilitating the initial investment through detailed subscription terms while also defining the long-term governance structure and shareholder rights. This agreement type is governed by South African law, primarily the Companies Act 71 of 2008, and includes essential provisions for share issuance, voting rights, board representation, pre-emptive rights, transfer restrictions, and exit mechanisms. It's commonly used in funding rounds, strategic partnerships, and corporate restructuring situations where new shareholders are entering the company.
