Share Allotment Agreement for Malaysia

Share Allotment Agreement Template for Malaysia

A Share Allotment Agreement under Malaysian law is a formal legal document that governs the issuance of new shares by a company to subscribers. The agreement is structured in accordance with the Companies Act 2016 and related Malaysian securities regulations, detailing the terms and conditions of the share subscription, including the number and class of shares being issued, the subscription price, payment terms, and completion mechanics. The document includes various warranties and representations from both the issuing company and the subscriber(s), alongside conditions precedent that must be satisfied before the shares can be allotted.

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What is a Share Allotment Agreement?

A Share Allotment Agreement is a crucial document used when a Malaysian company issues new shares to investors or other subscribers. This agreement is essential for compliance with the Companies Act 2016 and Malaysian securities laws, providing a legally binding framework for the share issuance process. It is commonly used in various scenarios including capital raising, employee share schemes, strategic investments, and corporate restructuring. The document captures all essential terms of the share issuance including pricing, rights attached to shares, conditions precedent, and completion requirements. It provides protection for both the issuing company and subscribers by clearly defining their respective rights and obligations, ensuring regulatory compliance, and establishing a clear process for the share allotment transaction.

What sections should be included in a Share Allotment Agreement?

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

2. Background: Recitals explaining the context of the share allotment and the company's authority to issue shares

3. Definitions and Interpretation: Definitions of key terms and interpretation clauses

4. Agreement to Allot and Subscribe: Core agreement for the company to allot and the subscriber to subscribe for the shares

5. Consideration: Details of the subscription price and payment terms

6. Conditions Precedent: Conditions that must be satisfied before the share allotment becomes effective

7. Completion: Mechanics and timing of the completion of the share allotment

8. Company's Representations and Warranties: Company's warranties regarding its authority, share capital, and business

9. Subscriber's Representations and Warranties: Subscriber's warranties regarding capacity and authority to subscribe

10. Covenants: Pre-completion and post-completion obligations of the parties

11. Termination: Circumstances under which the agreement may be terminated

12. Notices: Process for serving notices between parties

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

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

1. Multiple Tranches: Section detailing the structure and conditions for multiple tranches of share allotment

2. Share Rights: Detailed description of any special rights attached to the shares being allotted

3. Anti-Dilution Protection: Provisions protecting subscriber from future dilution of shareholding

4. Board Appointment Rights: Rights of the subscriber to appoint directors post-allotment

5. Tag-Along Rights: Rights of the subscriber to participate in future share sales

6. Drag-Along Rights: Rights to require the subscriber to sell shares in certain circumstances

7. Non-Competition and Non-Solicitation: Restrictions on competitive activities, if subscriber is strategic investor

8. Confidentiality: Detailed confidentiality provisions if not covered in general provisions

What schedules should be included in a Share Allotment Agreement?

1. Details of the Company: Company registration details, share capital structure, and existing shareholders

2. Details of the Shares: Specific details of shares being allotted including class, rights, and nominal value

3. Conditions Precedent Documents: List of documents required to satisfy conditions precedent

4. Completion Documents: Forms and documents required at completion

5. Form of Board Resolutions: Pro-forma board resolutions approving the share allotment

6. Form of Share Certificate: Pro-forma share certificate to be issued

7. Warranties: Detailed list of warranties given by the company and/or subscriber

8. Deed of Adherence: Form of deed to be signed by subscriber to adhere to shareholders' agreement, if applicable

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

Malaysia

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Technology

Financial Services

Manufacturing

Real Estate

Healthcare

Retail

Energy

Transportation

Telecommunications

Professional Services

Agriculture

Education

Construction

Mining

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Corporate Development

Investment

Board of Directors

Executive Management

Corporate Finance

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Investment Manager

Finance Director

Compliance Officer

Corporate Finance Manager

Board Director

Investment Banker

Private Equity Manager

Venture Capital Manager

Financial Controller

Corporate Development 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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