Share subscription deed Template for Pakistan

A Share subscription deed is a binding legal agreement between a company and its investors in Pakistan, spelling out the terms and conditions for purchasing newly issued shares. It details the exact number of shares, price per share, and payment schedule while protecting both parties' interests under the Companies Act 2017.

The deed becomes especially important during private placements and seed funding rounds, where companies need to document investor commitments clearly. It covers key aspects like representations and warranties, completion conditions, and what happens if either party defaults. Pakistani companies often use these deeds to maintain compliance with SECP regulations while raising capital.

Use a Share subscription deed when your company plans to issue new shares to investors in Pakistan, particularly during private placements or startup funding rounds. This document becomes essential once you've agreed on investment terms and need to formalize the arrangement before transferring shares.

The timing matters most when dealing with multiple investors, complex payment structures, or specific performance conditions. Companies raising capital through Series A funding, bringing in strategic investors, or conducting rights issues need this deed to protect all parties and ensure SECP compliance. It's particularly valuable when the investment involves staged payments or special share rights.

• Standard Share Subscription Deed: Basic version used for straightforward share purchases with upfront payment - common for small private companies
• Convertible Note Subscription Deed: Includes provisions for future conversion of debt to equity - popular with Pakistani startups
• Staged Investment Deed: Structures multiple payment tranches with performance milestones - used for larger investments
• Rights Issue Subscription Deed: Specifically designed for existing shareholders exercising pre-emptive rights
• Strategic Investor Deed: Contains additional provisions for board seats, veto rights, and special shareholder privileges

• Companies/Issuers: Pakistani businesses raising capital through new share issuance, responsible for drafting and executing the Share subscription deed
• Investors: Individual or institutional subscribers committing funds to purchase shares, including venture capitalists and angel investors
• Corporate Lawyers: Draft and review the deed terms, ensure SECP compliance, and protect client interests
• Company Secretaries: Handle documentation, maintain corporate records, and coordinate share issuance procedures
• Board of Directors: Approve the share subscription terms and authorize the deed's execution

• Company Details: Gather complete corporate information, including registration number, registered office, and authorized share capital
• Investment Terms: Document agreed share price, number of shares, and payment schedule
• Investor Information: Collect subscriber details, NTN numbers, and proof of identity
• Board Approvals: Secure necessary corporate authorizations and board resolutions
• Special Rights: List any special rights, voting privileges, or restrictions attached to shares
• Compliance Check: Review SECP requirements and Companies Act provisions for share issuance

• Parties' Information: Full legal names, addresses, and registration details of company and subscribers
• Share Details: Number, class, price, and rights attached to subscribed shares
• Payment Terms: Clear payment schedule, method, and consequences of default
• Representations: Company's authority to issue shares and subscriber's capacity to invest
• Conditions Precedent: Required approvals, documentation, and pre-completion obligations
• Completion Mechanics: Timeline and process for share transfer and certificate issuance
• Governing Law: Pakistani law application and jurisdiction clause

A Share subscription deed differs significantly from a Share Purchase Agreement in both purpose and timing. While both documents deal with share ownership transfers, they serve distinct functions in Pakistani corporate law.

• Timing of Creation: Share subscription deeds handle newly issued shares directly from the company, while Share Purchase Agreements transfer existing shares between shareholders
• Payment Structure: Subscription deeds often include staged payment terms and completion conditions, whereas Purchase Agreements typically involve immediate transfers
• Corporate Approvals: Subscription deeds require board authorization for new share creation, while Purchase Agreements mainly need existing shareholder consent
• Regulatory Requirements: Subscription deeds must comply with SECP's share issuance rules, while Purchase Agreements focus on transfer regulations
• Warranties: Subscription deeds contain company-level warranties about share issuance authority, while Purchase Agreements focus on seller's ownership warranties