Subscription letter Template for England and Wales

A Subscription letter is a formal agreement where an investor commits to buying shares or other securities in a company. It sets out the key terms of the investment, including the price per share, number of shares being purchased, and when payment needs to be made.

In England and Wales, these letters play a crucial role in private equity deals and company fundraising rounds. They contain important investor warranties, confirm compliance with securities laws, and create legally binding obligations once signed. Companies often use them alongside shareholder agreements to document the complete investment arrangement.

Use a Subscription letter when raising capital for your company through a private share offering. This document becomes essential during funding rounds, especially when bringing in new investors or when existing shareholders want to increase their stake in the business.

The timing matters most during pre-IPO fundraising, venture capital investments, or private equity deals. Companies need these letters before transferring any shares or accepting investment funds. They protect both parties by clearly documenting the investment terms, ensuring regulatory compliance, and creating a clear audit trail for future reference.

• Basic Share Subscription letter: Contains fundamental investment terms, share price, and payment details - commonly used for straightforward private investments
• Convertible Note Subscription letter: Includes conversion mechanisms and future equity terms - popular with startups and early-stage funding
• Series Investment Subscription letter: Features complex rights, preferences, and anti-dilution provisions - used in venture capital rounds
• Employee Share Scheme Subscription letter: Tailored for staff share offerings with specific vesting and employment conditions
• Institutional Investment Subscription letter: Enhanced warranties and regulatory compliance sections for large-scale institutional investors

• Company Directors: Approve and sign the Subscription letter on behalf of the issuing company, ensuring terms align with business objectives
• Investors: Review and execute the letter, committing to purchase shares under specified terms and conditions
• Corporate Lawyers: Draft and review the documentation, ensuring compliance with UK company law and FCA regulations
• Company Secretaries: Handle administrative aspects, including share certificate issuance and updating statutory registers
• Investment Advisors: Guide clients through the subscription process and validate investment terms

• Company Details: Gather company registration number, registered office, and current shareholding structure
• Investment Terms: Determine share price, number of shares, payment deadlines, and any special rights
• Investor Information: Collect full legal names, addresses, and tax status of all participating investors
• Regulatory Compliance: Check FCA requirements and investment promotion rules that apply
• Board Approval: Secure necessary corporate authorizations and shareholder consents
• Documentation: Prepare related certificates, board minutes, and share register updates

• Party Details: Full legal names and addresses of the company and investors
• Share Information: Number, class, and price of shares being subscribed for
• Payment Terms: Clear payment deadlines, account details, and completion mechanics
• Investor Warranties: Confirmations about investment capacity and regulatory compliance
• Company Warranties: Statements about share capital, authority to issue, and business condition
• Governing Law: Explicit choice of English law and jurisdiction
• Execution Block: Proper signature sections for all parties with dates

A Subscription letter differs significantly from a Subscription Agreement in several key aspects, though they both relate to investment transactions. Understanding these differences helps you choose the right document for your situation.

• Scope and Complexity: Subscription letters are typically shorter, focusing on core investment terms and basic warranties. Subscription Agreements are more comprehensive, including detailed representations, covenants, and conditions precedent
• Timing and Use: Letters often serve as initial commitment documents during fundraising, while Agreements are the final, detailed investment contracts
• Legal Framework: Letters create binding obligations but with limited terms. Agreements establish the complete legal framework for the investment relationship
• Documentation Structure: Letters usually stand alone, while Agreements often form part of a larger suite of investment documents including shareholder agreements and articles