Subscription Agreement

  • June 08, 2021 2:43 AM
    Message # 10603820
    Lorette Farris (Administrator)

    Previous: Investing in "Alternative Assets"

    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:

    • The Investor's financial situation is such that the Investor can afford to bear the economic risk of investing in the Company for an indefinite period of time,
    • The Investor can afford to suffer complete loss of its investment in the Shares or Units,
    • The Investor's knowledge and experience in financial and business matters are such that the Investor is capable of evaluating the merits and risks of the Investor's investment in the Shares or Units, and
    • The Investor understands and has taken cognizance of all the risk factors related to purchasing the Shares or Units.

    Next: Private Placements

    Last modified: June 08, 2021 3:00 AM | Lorette Farris (Administrator)