Share Issue Agreement for Canada

Share Issue Agreement Template for Canada

A comprehensive legal agreement governed by Canadian federal and provincial law that documents the terms and conditions under which a corporation issues new shares to subscribers. The agreement outlines the number and class of shares being issued, purchase price, payment terms, representations and warranties of both parties, closing conditions, and various rights and obligations. It ensures compliance with Canadian corporate and securities laws, including the Canada Business Corporations Act and applicable provincial securities legislation, while establishing a clear framework for the share issuance transaction.

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What is a Share Issue Agreement?

The Share Issue Agreement serves as the primary legal document for corporations issuing new shares in Canada, whether for capital raising, employee compensation, or strategic partnerships. This agreement is essential when a corporation wishes to issue new shares to investors or other parties, ensuring compliance with both federal and provincial regulatory requirements. The document typically includes detailed information about the share issuance, including price, number of shares, share class rights, representations and warranties, and closing conditions. It must comply with the Canada Business Corporations Act and relevant provincial securities laws, particularly regarding prospectus requirements or exemptions. The agreement is crucial for protecting both the issuing corporation and subscribers by clearly documenting their rights and obligations in the context of Canadian corporate law.

What sections should be included in a Share Issue Agreement?

1. Parties: Identification of the issuing corporation and the subscriber(s)

2. Background: Context of the share issuance, including corporate authority and purpose of the issuance

3. Definitions: Key terms used throughout the agreement

4. Share Subscription: Details of shares being issued, including class, number, and price per share

5. Purchase Price and Payment: Terms of payment, including method and timing

6. Closing: Timing and mechanics of the closing, including deliverables

7. Representations and Warranties of the Corporation: Corporate authority, valid issuance, compliance with laws, etc.

8. Representations and Warranties of the Subscriber: Investment sophistication, financial capacity, compliance with securities laws

9. Covenants: Ongoing obligations of both parties

10. Conditions Precedent: Conditions that must be satisfied before closing

11. Share Certificates and Registration: Process for issuing and registering share certificates

12. General Provisions: Standard legal provisions including notices, amendments, governing law, etc.

What sections are optional to include in a Share Issue Agreement?

1. Multiple Closings: Required when shares are to be issued in tranches or series

2. Anti-dilution Protection: Include when subscribers are to receive protection against future dilutive issuances

3. Pre-emptive Rights: Include when subscribers are to have rights to participate in future offerings

4. Board Nomination Rights: Include when subscribers are to receive board representation rights

5. Tag-Along Rights: Include when subscribers are to have co-sale rights

6. Drag-Along Rights: Include when majority shareholders need the ability to force minority shareholders to join in a sale

7. Registration Rights: Include for private companies that may go public in the future

8. Information Rights: Include when subscribers are to receive specific ongoing information rights

What schedules should be included in a Share Issue Agreement?

1. Schedule A - Share Capital: Detailed description of the corporation's share capital structure

2. Schedule B - Subscription Form: Form to be completed by subscriber with details of subscription

3. Schedule C - Corporate Resolutions: Copies of relevant corporate resolutions authorizing the share issuance

4. Schedule D - Disclosure Schedule: Exceptions to representations and warranties

5. Schedule E - Shareholders' Agreement: If applicable, form of shareholders' agreement to be signed

6. Appendix 1 - Wire Transfer Instructions: Banking details for payment of subscription price

7. Appendix 2 - Form of Share Certificate: Specimen of share certificate to be issued

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Stock Agreement

Cost

Free to use
Relevant Industries

Technology

Financial Services

Manufacturing

Real Estate

Healthcare

Energy

Mining

Telecommunications

Retail

Professional Services

Transportation

Agriculture

Construction

Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Board of Directors

Compliance

Treasury

Corporate Governance

Investor Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Secretary

General Counsel

Legal Counsel

Corporate Lawyer

Investment Manager

Finance Director

Board Director

Compliance Officer

Corporate Development Manager

Investment Banker

Securities Lawyer

Venture Capital Associate

Private Equity Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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