Application for Shares

application-for-shares-cubed-legal-documents

Application for Shares

 
 
 

INTRODUCTION

It’s early days for your business and you need capital investment. But you’re not ready to put your business out to market and sign Share Subscription Agreements just yet. So what can you do?

 

WHAT DOES IT COVER?

An ‘Application for Shares’ is a less formal way for investors to apply for shares in your company. Compared to a Share Subscription Agreement, an Application for Shares does not contain company and founder warranties. Rather, it is a short form agreement often used in early stage investment rounds, accompanied by a Shareholders Agreement.

This document contains details of how many shares an investor is applying for and how much they are willing to pay for them. Comparatively, regardless of which funding round you are going through, having a recorded share offer document is essential and ensures you meet the relevant statutory compliance requirements.

 

WHY IS THIS IMPORTANT?

In order to protect both yourself and your company, it is important to have an Application for Shares document that is clear and well written. An document which accurately describes the extent incoming shareholders’ interests in the company will safeguard the company from potential hurdles in the future.


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