Share Subscription Agreement

WHEN YOU SHOULD USE THE SHARE SUBSCRIPTION AGREEMENT

The Subscription Agreement should be used if you are intending to subscribe for shares in a privately-held company, or if you are a Company and you want to issue shares to incoming shareholder/s.

If you are buying shares in a privately owned company from an existing shareholder, you should use the Share Purchase Agreement.  If you are purchasing the business and not buying or being issued shares, you should use the Business Purchase Agreement template.  

Before subscribing for shares in a Company, you should consider undertaking Due Diligence to review the assets and structure of the entity to determine any risks and liabilities.

KEY ISSUES

Commercial:

• You should consider and discuss with your accountant whether stamp duty, or any other taxes (Capital Gains Tax; GST), will be payable in relation to this transaction.
• You should review with your accountant the company's financial statements, including the balance sheet and profit and loss account and any associated taxation issues.

Legal:

You should consider and discuss with us or your legal advisor:

• the warranties that should be obtained in relation to the Company and the information provided to you (the template only has a basic warranty schedule). 
• the application of related party transactions or applications of financial assistance provisions of the Corporations Act.
• the acquisition of chapters 6 and 7 of the Corporations Act and Foreign Acquisition & Takeovers Act.
• settlement procedures and required company secretarial tasks.