Document background
The Preferred Stock Purchase Agreement is a crucial document used when a Philippine corporation seeks to raise capital by issuing preferred shares to investors. This agreement is particularly common in venture capital and private equity transactions, as well as in corporate restructuring scenarios. The document must be structured to comply with Philippine corporate and securities laws, including the Corporation Code (Batas Pambansa Blg. 68) and the Securities Regulation Code (Republic Act No. 8799). It sets forth the complete terms of the investment, including share price, investor rights, corporate governance provisions, and regulatory compliance requirements. The agreement is especially important as it establishes the relationship between the company and its preferred shareholders, defining their special rights and privileges such as dividend preferences, liquidation preferences, and potential board representation. When foreign investors are involved, the agreement must also address Philippine foreign ownership restrictions in certain industries.
