Share Subscription Agreement Template for Nigeria

A Share Subscription Agreement under Nigerian law is a formal contract that documents the terms and conditions under which an investor agrees to purchase newly issued shares in a company. The agreement must comply with the Companies and Allied Matters Act (CAMA) 2020 and other relevant Nigerian legislation. It details the number and class of shares being issued, subscription price, payment terms, warranties, and completion mechanics. The document includes necessary provisions for regulatory compliance, particularly important in the Nigerian context where both local and foreign investment considerations may apply.

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What is a Share Subscription Agreement?

The Share Subscription Agreement is a crucial document used when a company wishes to raise capital by issuing new shares to investors in Nigeria. It serves as the primary legal instrument documenting the terms and conditions of share subscription, ensuring compliance with the Companies and Allied Matters Act (CAMA) 2020 and other relevant Nigerian regulations. This agreement is typically used in various scenarios including startup funding rounds, corporate restructuring, or strategic investments. It contains essential provisions regarding share price, payment terms, warranties, and regulatory compliance, while also addressing specific Nigerian requirements such as local ownership restrictions (if applicable) and Corporate Affairs Commission filing requirements. The document is fundamental to both private and public companies seeking to expand their capital base while protecting the interests of all parties involved.

What sections should be included in a Share Subscription Agreement?

1. Parties: Identification of the Company and the Subscriber(s)

2. Background: Context of the transaction, including company's current share capital structure and purpose of subscription

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Subscription: Details of shares being subscribed for, including number, class, and price

5. Payment Terms: Subscription price, payment method, and timing

6. Conditions Precedent: Conditions that must be satisfied before completion

7. Completion: Timing, location, and mechanics of completion, including actions required by each party

8. Company's Warranties: Representations and warranties given by the company regarding its status, share capital, and business

9. Subscriber's Warranties: Representations and warranties given by the subscriber regarding capacity and authority

10. Confidentiality: Obligations regarding confidential information

11. Notices: Process and requirements for giving formal notices under the agreement

12. General Provisions: Standard boilerplate clauses including governing law, entire agreement, and amendments

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

1. Regulatory Compliance: Required when the subscription involves regulated industries or requires regulatory approvals

2. Foreign Investment Provisions: Required when subscriber is a foreign investor, addressing NIPC requirements

3. Tag-Along Rights: Optional protection for minority shareholders to join in sale of shares

4. Anti-dilution Rights: Protection against future share issues at lower valuations

5. Board Representation: Rights of subscriber to appoint directors, if applicable

6. Dividend Rights: Special dividend rights attached to subscribed shares, if any

7. Pre-emptive Rights: Rights of first refusal on future share issues

8. Exit Rights: Provisions regarding future sale or IPO of the company

What schedules should be included in a Share Subscription Agreement?

1. Share Capital Structure: Details of company's share capital before and after subscription

2. Conditions Precedent Documents: List of required documents and confirmations

3. Completion Documents: List of documents to be delivered at completion

4. Company Warranties: Detailed warranties given by the company

5. Corporate Information: Key corporate details including directors, officers, and registered office

6. Form of Board Resolutions: Template board resolutions approving the subscription

7. Form of Share Certificate: Template share certificate to be issued

8. Disclosure Letter: Exceptions and qualifications to warranties

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

Jurisdiction

Nigeria

Publisher

Genie AI

Cost

Free to use

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