Enterprise Investment Scheme Subscription Agreement
EIS shares must be subscribed for, meaning they must be newly issued shares and not shares sold by an existing shareholder.
The subscription for shares under the Enterprise Investment Scheme will require a degree of formality and it is therefore usual for the parties to enter into a subscription and shareholders agreement.
Use this agreement to document an EIS share subscription and post-investment governance
This Subscription Agreement is made between (1) the Founder(s), (2) the Investor(s) and (3) the Company.
It sets out the terms on which the investor(s) will subscribe for shares in the company and how the business will be run following the subscription.
Founder covenants and warranties
It is likely that the investor(s) will want covenants from the founders specifically in relation to the company being run in a way that does not jeopardise their EIS relief, and warranties as to the business that is being invested in.
HMRC and the EIS1 compliance statement
HMRC will require sight of the subscription or shareholders agreement (if there is one) when the company completes its EIS1 compliance statement.
What the agreement covers
- Subscription terms
- Rights, obligations and restrictions of the investors (including any investor director provisions)
- Warranties and operating commitments
- Reserved matters and transfers
- Interaction with the company’s articles, duration, notices and confidentiality
- Standard provisions (including costs, counterparts and governing law and jurisdiction)
- Schedules covering post-subscription details/capitalisation, warranties and other matters (and, if required, articles of association)
Enterprise Investment Scheme Subscription Agreement is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.