Amy Horn


Subscription Agreement Vs Stock Purchase Agreement

Every year, when partners file their own tax returns, they pay taxes on business income considered taxable. All conditions for the payment of taxes on corporate income should be included in the partnership agreement. Audit firms and law firms are generally incorporated as general trading companies. The scope of the shareholders` agreement is broader, as it clearly defines the roles, responsibilities and powers of a shareholder in the company. As a general rule, a share subscription agreement must include the number of shares that the company issues to the shareholder, as well as the order and date on which the shareholder makes the payment. A share subscription contract varies considerably according to the needs of each company, but some of the general clauses contained are confidentiality, compliance with the condition precedent, tranches as well as guarantee and compensation. Now let`s look at how this transfer of shares is legally held by a shareholder and what types of agreements a company and shareholders can enter into with the company in order to make this transfer of money and shares legally binding and enforceable. Although these agreements are not subject to a particular law, the conditions of these agreements are most often mentioned in the articles of association of the companies. AOA is essentially a document that defines the roles and responsibilities of directors, the nature of the transactions to be taken and the means used by shareholders to exercise control of the board of directors. From the name itself, we can imagine an agreement in which shares are transferred from one party to another.

Shares give shareholders (one who owns the shares) ownership of the company, and this can be done by purchasing one share by the company or by the company`s existing shareholders. To make a transfer legally binding, it is always advisable to enter into an agreement. A share subscription contract is the contract of sale between a company and an investor when the company issues shares to the investor. It is a promise from the company to give a certain number of shares/securities to an investor at a set price. One of the differences between the share subscription contract and the shareholders` agreement is that the shareholder agreement is more detailed. The share subscription contract is usually simple and simple, but it can sometimes contain detailed conditions on guarantees and compensation for shareholders. A share subscription agreement would be necessary if the company wanted to raise funds, in particular by issuing shares, by not diluting the owners` share. He uses this money for his own needs. Normally, the founders of the company use their own money at the beginning of the operation, but finally, the founders must look for money from angel investors or friends or outside people that must be issued in return for the investment of shares…

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