Share subscription deed Template for Canada

A Share subscription deed is a binding legal agreement used when investors buy shares in a Canadian company. It spells out the key terms of the share purchase, including the price per share, total investment amount, and when the deal will close. Think of it as the official playbook for how new shares will be issued and paid for.

Beyond just recording the sale details, this deed protects both parties by clearly stating any conditions that need to be met before the shares change hands. For private companies especially, it helps ensure the share transfer follows Canadian securities laws and corporate regulations. The deed can also include important shareholder rights, like board representation or future investment options.

Use a Share subscription deed when bringing new investors into your Canadian company, especially for significant private placements or startup funding rounds. This agreement becomes essential during any capital raise where you need to document exactly how many shares investors are buying and at what price.

The deed proves particularly valuable when dealing with sophisticated investors, multiple funding tranches, or complex investment terms. It helps prevent misunderstandings by clearly documenting key conditions, like minimum investment thresholds or regulatory approvals. Many growing companies use it alongside their term sheets during Series A or B rounds to create legally binding commitments from their investors.

• Basic Share Subscription Deed: Covers essential terms like share price, number of shares, and payment details - ideal for straightforward investments with minimal conditions
• Convertible Note Subscription Deed: Includes conversion mechanics and triggers for debt-to-equity scenarios
• Multi-investor Subscription Deed: Features scaled investment tiers and coordinated closing provisions for group investments
• Staged Investment Deed: Contains milestone-based funding releases and performance conditions
• Employee Share Plan Deed: Specifically structured for employee share purchase programs with vesting schedules

• Private Companies: Issue shares and set terms through the Share subscription deed during funding rounds or expansion
• Investors: Review and sign the deed to confirm their investment terms and secure their rights as new shareholders
• Corporate Lawyers: Draft and customize the deed to ensure compliance with Canadian securities laws
• Board Members: Approve and execute the deed on behalf of the company
• Company Secretary: Maintains official records and ensures proper registration of new shares
• Financial Advisors: Guide clients through investment terms and valuation aspects

• Company Details: Gather current share structure, share classes, and authorized capital
• Investment Terms: Document exact share price, number of shares, and total investment amount
• Investor Information: Collect legal names, addresses, and tax identification details of all subscribers
• Payment Terms: Specify payment method, timing, and any escrow arrangements
• Conditions: List any regulatory approvals, board consents, or other prerequisites
• Special Rights: Detail any unique investor privileges, board seats, or anti-dilution provisions
• Closing Timeline: Set clear dates for document signing and share issuance

• Parties: Full legal names and addresses of the company and all subscribers
• Share Details: Class, number, and price of shares being issued
• Payment Terms: Amount, method, and timing of subscription payments
• Representations: Company's authority to issue shares and subscriber's capacity to invest
• Conditions: Required approvals, consents, and closing requirements
• Warranties: Standard promises about company status and share ownership
• Governing Law: Explicit statement of Canadian jurisdiction
• Execution Block: Signature spaces for all parties with witness provisions

A Share subscription deed is often confused with a Share Purchase Agreement, but they serve distinct purposes in Canadian corporate law. While both deal with share ownership transfers, their timing and context differ significantly.

• Timing of Transfer: A Share subscription deed involves new shares being created and issued directly from the company, while a Share Purchase Agreement transfers existing shares between current shareholders or to new buyers
• Legal Requirements: Subscription deeds must comply with corporate authorization rules for new share issuance, whereas purchase agreements focus on transfer restrictions and existing shareholder rights
• Payment Structure: Subscription funds typically go directly to the company's treasury for new capital, while purchase payments flow between the buying and selling shareholders
• Documentation: Subscription deeds often include more detailed company representations about share creation and capitalization tables, while purchase agreements focus on the seller's ownership rights and transfer warranties