Common Contracts

Private Placement Subscription Agreements

December 27th, 2016

• Filed
  December 27th, 2016

In nearly any private placement offering, while the PPM (private placement memorandum) is the core disclosure document, it is not in itself a contract, nor is it the final word on the process. Another critical contract, the subscription agreement, is what actually transfers your company’s securities to the investors (i.e., shares, units, etc.). However, the subscription agreement has many more critical functions that protect the private placement issuer from all manner of liability and contingencies. The subscription agreement not only binds the investor to certain rules, but it is the document whereby the investor warrants that it possesses the characteristics necessary under the law to actually invest (e.g., Regulation D and/or crowdfunding rules).