Stock Issuance Agreement for the United Kingdom

Stock Issuance Agreement Template for England and Wales

A Stock Issuance Agreement under English and Welsh law is a legally binding document that governs the issuance of new shares by a company to specified subscribers. The agreement details the terms and conditions of the share issuance, including the number and class of shares, purchase price, payment terms, and completion mechanics. It includes warranties from both the company and subscribers, and ensures compliance with the Companies Act 2006 and other relevant legislation in England and Wales.

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What is a Stock Issuance Agreement?

The Stock Issuance Agreement is essential when a company wishes to issue new shares, whether for raising capital, employee incentivization, or corporate restructuring. This document, governed by English and Welsh law, ensures compliance with the Companies Act 2006 and related regulations while protecting both the issuing company and subscribers. The agreement typically includes detailed information about the shares being issued, payment terms, representations and warranties, and any special rights or restrictions attached to the shares. It's particularly crucial for maintaining clear documentation of ownership and preventing future disputes regarding share issuance terms.

What sections should be included in a Stock Issuance Agreement?

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

2. Background: Context of the share issuance and company status

3. Definitions: Key terms used throughout the agreement

4. Subscription Details: Number, class, and price of shares being issued

5. Payment Terms: Terms and method of payment for shares

6. Completion: Process and timing of share issuance completion

7. Warranties: Company and subscriber representations and warranties

8. Governing Law: Specification of applicable law and jurisdiction

What sections are optional to include in a Stock Issuance Agreement?

1. Pre-emption Rights: Rights of existing shareholders, used when relevant to company structure

2. Tag-Along Rights: Rights to join in sale of shares, typically used in private companies with multiple shareholders

3. Drag-Along Rights: Rights to force minority shareholders to join in sale, typically used in private companies with multiple shareholders

4. Transfer Restrictions: Limitations on share transfers, typically used in private companies or when specific transfer restrictions apply

What schedules should be included in a Stock Issuance Agreement?

1. Share Certificate: Form of share certificate to be issued

2. Shareholders' Rights: Detailed description of rights attached to shares

3. Company Information: Key company details and existing share capital structure

4. Board Resolutions: Copies of relevant board resolutions approving the share issuance

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

England and Wales

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions
Industries

Companies Act 2006: Primary legislation governing company law in England and Wales, including provisions for share capital, allotment, directors' duties, pre-emption rights, and share certificates and transfers

Financial Services and Markets Act 2000: Key legislation covering financial promotions, regulated activities, and prospectus requirements for share issuance

Companies (Share Capital and Debentures) Regulations 2008: Secondary legislation providing detailed rules on share capital and debentures

Companies (Model Articles) Regulations 2008: Secondary legislation setting out default articles of association for companies

UK Listing Rules: Regulations applicable to companies listed on UK stock exchanges, governing share issuance and trading

UK Corporate Governance Code: Guidelines for corporate governance practices applicable to listed companies

Market Abuse Regulation (MAR): Regulations preventing market abuse and insider trading in relation to share issuance and trading

Articles of Association: Company's constitutional document containing rules about share rights and transfer restrictions

Income Tax Act 2007: Tax legislation relevant to share issuance and its implications for individual shareholders

Corporation Tax Act 2010: Tax legislation governing corporate tax implications of share issuance

Stamp Duty Legislation: Tax regulations concerning stamp duty on share transfers and issuance

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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