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A Share Subscription Agreement (Private Long Form) is a structured form used by private companies to record and formalize an investor's commitment to purchase newly issued shares directly from the company. It captures every detail required to complete the transaction β subscriber identity, share class, number of shares, subscription price, payment instructions, investor representations, closing conditions, and execution blocks β in a single organized document. Unlike a share purchase agreement, which records the transfer of existing shares between shareholders, a subscription agreement governs the creation and issuance of new equity, making it the primary record for any private placement or capital raise.
Issuing shares without a completed subscription form leaves the company exposed on multiple fronts: there is no signed record of the investor's eligibility representations, no documented agreement on price or share class, and no clear closing condition tying allotment to receipt of cleared funds. These gaps create disputes over what was agreed, complicate cap table reconciliation, and can attract regulatory scrutiny if the company later raises institutional capital or prepares for an acquisition. A properly completed long-form subscription agreement gives both parties a clear, enforceable record of the transaction β and gives future investors and acquirers the documentation they need to confirm that prior share issuances were conducted correctly.
| If your situation is⦠| Use this template |
|---|---|
| Simple seed round with a single investor and standard terms | Share Subscription Agreement (Short Form) |
| Investor purchasing existing shares from a current shareholder | Share Purchase Agreement |
| Convertible instrument that may become equity at a future round | Convertible Note Agreement |
| Subscription paired with a formal shareholders' agreement | Shareholders Agreement |
| Employee or advisor receiving equity under a stock option plan | Stock Option Agreement |
| Issuing shares under a SAFE instrument | Simple Agreement for Future Equity (SAFE) |
| Public offering or prospectus-based subscription | Prospectus Subscription Form |
Why it matters: A mismatch between the subscription form and the company's share register can make the allotment legally defective and require a corrective corporate resolution to fix.
Fix: Verify both the company's and the subscriber's exact legal names against official registration documents before completing the form.
Why it matters: Accepting a subscription without confirming accredited investor status exposes the company to securities law violations, even if the subscription form was fully completed.
Fix: Attach or separately collect supporting documentation β tax returns, financial statements, or a professional certification β confirming the subscriber meets applicable eligibility thresholds.
Why it matters: Accepting a subscription before cleared funds arrive creates an enforceable obligation to allot shares even if the payment ultimately fails.
Fix: Make company countersignature β or at minimum allotment β conditional on confirmed cleared funds, and state this explicitly in the closing conditions field.
Why it matters: A completed subscription form with no corresponding share register update leaves the investor without formal legal title to the shares and creates discrepancies in corporate records.
Fix: Set a post-closing checklist that includes share register update, cap table reconciliation, and share certificate issuance within 30 days of allotment.
Complete the header with the company's full registered legal name, jurisdiction of incorporation, and company number. This establishes the issuing entity unambiguously.
π‘ Pull the exact legal name from your certificate of incorporation β even a minor spelling variation can create a title discrepancy in the share register.
Enter the subscriber's full legal name and address exactly as they appear on government-issued ID or corporate registration documents. Note whether they are an individual, corporation, or trust.
π‘ For corporate subscribers, request a copy of the signing officer's authorization resolution before completing this field.
Enter the exact share class, the number of shares being subscribed, the board-approved price per share, and the resulting total consideration. Confirm these figures against the board resolution authorizing the issuance.
π‘ Cross-check the subscription price against your most recent 409A valuation or board-approved pricing memo before sending the form to the investor.
Fill in all bank transfer details β account name, account number, routing or SWIFT/IBAN number, and bank address. Add a unique reference field tied to the subscriber's name or a subscription number.
π‘ Confirm wire details directly with your bank rather than copying from a prior form β account details occasionally change and an error delays closing.
Walk through each representation with the investor before they sign. Confirm accredited investor status with supporting documentation (income verification, net worth statement) where required by applicable securities law.
π‘ Keep copies of supporting documentation on file alongside the executed agreement β regulators may request evidence of investor eligibility in a future review.
Confirm that the stated closing conditions reflect the actual board approval process and expected funds-clearing timeline. Adjust the conditions if the company requires additional steps such as a shareholder vote.
π‘ Set a realistic funds-clearing window β 3β5 business days for domestic wires, 5β10 for international β to avoid allotting shares before funds clear.
Obtain the subscriber's signature first, then have an authorized officer countersign on behalf of the company. Date both execution blocks on the day of actual signing.
π‘ Do not countersign until cleared funds have been confirmed β the company's signature constitutes acceptance of the subscription.
Once all closing conditions are met, record the allotment in the company's share register and update the cap table with the new shareholder's details, share class, and number of shares.
π‘ Issue a share certificate or electronic equivalent to the investor within the timeframe required by your jurisdiction's corporate statutes β typically 30β60 days after allotment.
An accredited investor is an individual or entity meeting minimum income, net worth, or professional-knowledge thresholds set by securities regulators β for example, a net worth exceeding $1M (excluding primary residence) or annual income above $200,000 in the US. Private placements typically rely on an exemption from registration that requires all investors to qualify. Confirming and documenting accredited investor status on the subscription form protects the company if regulators later review the offering.
Once both parties sign and all closing conditions are satisfied β typically receipt of cleared funds and board approval β the company's board formally allots the shares, updates the share register, and issues a share certificate or electronic equivalent to the investor. The investor should also receive a copy of the executed agreement and any updated cap table or shareholder notice required by the company's articles.
Yes. Each investor completes and signs a separate subscription form capturing their individual details, share allocation, and representations. Using a separate form per investor creates a clean, individual record for each subscription and simplifies the allotment and share register update process. The company then allots all subscriptions in a single board resolution after the round closes.
For a friends-and-family raise involving one or two investors with a combined total under $50,000, a short-form agreement may be sufficient. The long form is recommended when the amount is material, when investors are not known to the founders personally, or when future fundraising rounds will involve institutional investors who will conduct diligence on prior subscription documentation.
Par value is the nominal minimum value assigned to each share in the company's articles of incorporation β often as low as $0.0001 per share. Subscription price is the actual amount the investor pays, set by the board based on the company's current valuation. The difference between the two is recorded as additional paid-in capital on the balance sheet. Entering par value as the subscription price is a common and material error.
A share purchase agreement records the transfer of existing shares between a seller and a buyer β the company is not a party and issues no new shares. A subscription agreement records the issuance of new shares directly from the company to an investor. Use a purchase agreement when an existing shareholder is selling; use a subscription agreement when the company is raising new capital.
A shareholders agreement governs the ongoing relationship among all shareholders β voting rights, transfer restrictions, drag-along, and tag-along provisions. A subscription agreement is a one-time transaction document recording a single investor's purchase of new shares. The two documents are complementary: the subscription form closes the investment; the shareholders agreement governs what happens afterward.
A stock option agreement grants an employee or advisor the right to purchase shares at a fixed price after a vesting period β no shares are issued at signing and no immediate payment is made. A subscription agreement records an investor's immediate purchase of shares for cash consideration. Options are for incentive compensation; subscriptions are for capital raises.
A convertible note is a debt instrument that converts into equity at a future financing round, typically at a discount. A subscription agreement issues equity immediately at a fixed price. Convertible notes defer valuation to the next round; subscription agreements require a valuation at the time of signing. Startups at early stages often prefer convertible notes to avoid premature valuation debates.
Seed and Series A subscription forms typically reference a concurrent term sheet or SAFE conversion, with investor representations covering participation in prior rounds.
Subscription forms for real estate holding companies often include additional representations on source of funds and beneficial ownership to satisfy anti-money-laundering requirements.
Regulated financial entities require enhanced investor eligibility documentation and may need to retain subscription forms as part of regulatory compliance records.
Law and accounting firms issuing equity to incoming partners use subscription forms to formalize the capital contribution and record the new partner's share class and ownership percentage.
| Path | Best for | Cost | Time |
|---|---|---|---|
| Use the template | Private companies issuing shares to a small number of known investors in a straightforward seed or friends-and-family round | Free | 15β30 minutes per subscriber |
| Template + professional review | Rounds involving multiple investors, material amounts, or first-time founders unfamiliar with share issuance mechanics | $300β$800 for a corporate lawyer or accountant review | 1β3 days |
| Custom drafted | Institutional rounds, regulated industries, cross-border investors, or complex share class structures with preference stacks | $1,500β$5,000+ | 1β2 weeks |
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