An agreement can be put into writing or you can agree to it verbally. When you agree to pay for the money that you borrowed from a friend or a family member, that is a form of verbal agreement. On the other hand, when the terms and conditions are put into writing, that is a form or written agreement. Both types of agreements are legal, but it is with written agreements that people put their trust on. Aside from providing a tangible proof or evidence of the details of the agreement, written agreements are also suitable for long-term transactions and detailed agreement transactions. One agreement transaction that should never go without a written agreement is a subscription agreement.
What Is a Subscription Agreement?
How can you get into an agreement? One of the most important elements of an agreement is offer and acceptance. There will always be at least two parties involved in an agreement where one party makes an offer and the other party accepts it. It’s obvious that if the other party declines, the partnership cannot be formed and there will be no agreement transactions in the future. A subscription agreement also works this way. It can be between a private investor and a company, or between a company and a subscriber. In a subscription agreement, the company offers to sell a certain number of their shares or stocks at a specific price that the subscriber or private investor accepts by buying the said shares.
What is the use of this partnership agreement to the selling company or shareholder? A subscription agreement helps attract possible investors. Selling the company’s shares or ownership will help them in raising their capital from private investors. There is also no need to register the new ownership with the Securities and Exchange (SEC) if the sale was done through a subscription agreement, which is an advantage.
Common Mistakes to Avoid
It’s common because a lot of company’s fall prey to these mistakes thinking that it can do them more good, when in fact it is harmful. One of these common mistakes is making the contents of the agreement template too complicated. Well, if you think that complicated details can put you in a more advantageous position, then you aren’t really thinking. Instead of an advantage, you might just be opening a can of worms or cause confusion and misunderstanding. The trick is to keep things as simple as possible and ensure that the details are complete.
The second common mistake to avoid in a subscription agreement is not getting a legal counsel. It’s a legal document, is it not? While hiring a legal counsel may be costly, financial mistakes and relying only to the little details that you know may result to problems and may cause you to spend more. A legal expert who specializes in finance would be worth all your time and money.
Understanding how something works or what it does can be best learned through template samples. Here are a few sample subscription agreements that can help you get familiar with a subscription agreement.
1. Sample Stock Subscription Agreement
2. Editable Subscription Agreement Template
3. Software Subscription and Services Agreement Sample
4. Sample Subscription Agreement for Friends and Family Investment
5. Real Estate Subscription Agreement Sample
How to Write A Simple Subscription Agreement
Come up with a simple subscription agreement using these simple steps.
Step 1: Educate yourself about how the agreement works.
A business plan without research it deemed to fail. So if you want your agreement to work, you first need to know what the agreement is down to the little details. This way you can personalize your content or add details that may only be applicable to your transaction.
Step 2: Consult a legal counsel.
Work with a legal counsel who is an expert in finance. They know and understand the agreement more than you do. They’ll help you get the best out of the transaction and you can learn a great deal from them, too.
Step 3: Gather samples and templates for reference.
Get additional help from samples and templates. It will help you figure out what format to use, the appropriate words to add and the general agreement details to include. A subscription agreement may also include clauses from that of confidentiality agreements or sale of business agreements so you might also want to check out some of their samples.
Step 4: Be specific with your details.
Avoid using ambiguous words and difficult words in your agreement as this may cause confusion and misunderstanding. If you want a simple agreement, then use simple yet specific words in your statement.
6. Sample Subscription Agreement Template
7. Multi-Offering Subscription Agreement Sample
8. Sample Preferred Stock Subscription Agreement
9. Equity Subscription Agreement Sample
10. Journal Subscription Agreement Template
Getting involved in a legal agreement is no joke. Taking risks is good but playing on the safe side has also its advantages. Weighing one’s choices and priorities appropriately is a good practice to avoid legal problems or issues, whether you are an investor or company owner. A well-written agreement is an attractive agreement and you should know that being able to identify a well-written agreement matters.
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