Corporate agreements

Share Subscription Agreement

A Share Subscription Agreement (SSA) is a contract between a company and an investor that records the terms for the subscription and primary issuance of shares. It is the definitive document that brings investment capital into the company.

This agreement sets out the subscription mechanics, including the number of shares, price, payment terms, and the pre- and post-money capitalisation table. It is the central instrument in the fundraising process, sitting between the initial term sheet and the ongoing governance rules in a Shareholders' Agreement.

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Governing law
Companies Act, 2013 + Indian Contract Act, 1872
Sections
s. 42s. 62s. 56

When this is the right filing

  • When a company is issuing fresh equity shares to an investor in a primary fundraise.
  • To document the commercial terms of a private placement under Section 42 of the Companies Act, 2013.
  • When the parties need a binding contract for the subscription mechanics before executing a separate Shareholders' Agreement for post-closing governance.
  • When a non-resident investor is subscribing, to record the pricing and conditions required for FEMA compliance and FC-GPR reporting.
  • Do not use this agreement to govern the ongoing rights and obligations of shareholders after the investment; those rights are covered in a Shareholders' Agreement.

What the court looks for

  • A clear identification of the parties and the company's pre- and post-money capitalisation structure.
  • Compliance with the private placement procedure under Section 42, including the use of Form PAS-4 and a separate bank account.
  • The definitive subscription price and the number of shares to be allotted, confirming the authority under Section 62 for further issue.
  • Evidence that the pricing meets the fair market value floor if the investor is a non-resident, as required by FEMA regulations.
  • A clear statement that the agreement is subject to the Indian Contract Act, 1872, and the Companies Act, 2013.

The structure the court expects

The components of the filed format, in the order they appear. LexPilot fills every one of them from your facts and papers.

  1. 1Recitals
  2. 2Schedule 1 — parties & capitalisation (pre- and post-money)
How it opens
WHEREAS the Company is engaged in the business of [business]; AND WHEREAS the Investor has agreed to subscribe to, and the Company has agreed to issue and allot, the Subscription Shares for the Subscription Amount, on the terms set out below; AND WHEREAS the Parties have agreed to enter into a Shareholders' Agreement of even date governing their ongoing rights and obligations.

Bracketed items are filled from your case.

Frequently asked questions

What is the difference between a Share Subscription Agreement and a Shareholders' Agreement?

A Share Subscription Agreement governs the primary issuance of shares and the flow of investment funds into the company. A Shareholders' Agreement is a separate contract that governs the ongoing relationship, rights, and obligations of the shareholders after the investment is complete. They are typically executed in parallel.

What statutory filings are triggered by executing this agreement?

The issuance of shares under this agreement requires compliance with the private placement process under Section 42, including filing Form PAS-4 and PAS-3 for the return of allotment. If the investor is non-resident, the company must also file Form FC-GPR with the Reserve Bank of India within 30 days of allotment.

Does the Share Subscription Agreement itself need to be stamped?

Yes, as a contract under the Indian Contract Act, 1872, the agreement attracts stamp duty according to the applicable state stamp act. Additionally, the instrument of share transfer or allotment itself attracts a separate stamp duty under the Indian Stamp Act, and the applicable rate should be confirmed.

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