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A Subscription Agreement is an investor's application to purchase Shares or Units of a Company through an investment in a private offering; a two-way guarantee between a Company and a new Subscriber (Shareholder or Member). The Company agrees to sell a certain number of Shares or Units at a specific price, and in return, the Subscriber promises to buy the Shares or Units at the predetermined price.
Precursor: Know Your Investor (Pre-Existing Relationship)
A pre-existing relationship is one that pre-dates an offer in such a duration of time to enable the Company to evaluate the prospective investor’s financial sophistication, circumstances, suitability, and his or her ability to understand the nature and risks of the Interests to be offered, such as:
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