Share Subscription Agreement Share Purchase Agreement Difference

It is an exchange of promises between a potential shareholder known as a subscriber and a company. A share purchase agreement provides that the company agrees to sell a certain number of shares at a specified time and price, so that the subscriber becomes a shareholder. In return, the subscriber agrees to buy the shares at a certain time and price. As we know, shareholders are the owners of the business or they get ownership of their investments in the business. Unlike the share purchase agreement, the amount of the shareholders` pact is much larger. Since share purchase agreements require only a legal agreement between the parties on the transfer of shares, the shareholders` pact defines the rights and other obligations of the parties. It defines the actual relationship between the parties with respect to the rights arising from the acquisition of shares in the company. The main objective of the action agreement is to clarify all the points relating to the supply of SSA and to have a clear agreement with the shareholders necessarily defining the investment mechanisms that the investor will receive in the company. The main objective of this agreement is to association the two parties in the implementation of the investment process. The main objective of this share purchase agreement is to prove that both parties have agreed on the terms and conditions and that the amount of the shares must be transferred from the seller to the buyer and at what cost. This also includes various information about the company whose shares are acquired and the rights the buyer obtains.

One of the most important things mentioned in this agreement is the type of shares transferred from seller to buyer. The main purpose of a share purchase agreement is to show how many shares need to be transferred and at what price each time a company seeks additional investment through equity, there are two possibilities: either they sell their share to an investor or they spend new shares on investors. When a company issues new shares, the consideration for these shares is on the company`s account, while when a founder sells his share, the consideration for those shares is on the founder`s account. The share exchange contract is drawn up by the company when a company wishes to issue new shares of the company. This occurs when a company wants to diversify its activities or expand the scope of its business. It is executed when the company wants to issue new shares and not the founders who sell their shares. A share purchase agreement is a promise made by the company that makes shares to the investor that it issues a certain number of shares to an investor at a specified price. If the company wishes to sell its shares only to accredited investors meeting certain requirements, this process is called a private placement. The most common criteria for an accredited investor are: the agreement refers to the right of minority shareholders.

It determines the liability, privileges and protection of shareholders. A shareholders` pact is not mandatory in Indian law, but it is binding as it is a contractual agreement. Minority shareholders are shareholders who hold less than 50% of the company`s shares. Most of the time, the majority parts of the company are the founders and promoters of the company. The company`s decisive and important decisions are made only by them.