In many cases, a subscription contract accompanies the memorandum. Some agreements set a certain return paid to the investor, for example. B a certain percentage of the business surplus or lump sum payments. In addition, the agreement sets the payment dates for these returns. This structure gives priority to the investor, as he or she gets a return on the investment in front of the creators of companies or other minority owners. 5) “Understanding” section: The “Agreements” section contains additional confirmations from the investor, which are essential to avoid liability, prevent litigation and maintain compliance with Regulation D, which provides for exceptions. For example, the investor can confirm: 1) that the agreement could be rejected by the company; 2) that she understands that she could lose all her money; 3) that it be bound by this agreement if it is accepted by the company; 4) that no federal or national authority has assessed the fairness or accuracy of this agreement; 5) that the investor cannot otherwise sell, transfer or sell the shares unless he registers the shares under the Securities Act 1933 and/or national securities law; 6) that both this agreement and the enterprise agreement must be treated confidentially; 7) that the investor should be advised by his personal tax advisor and not by the company; and 8) that the business could be taxed as an entity and not as an LLC, which could significantly reduce the investor`s return. 3rd section of the subscription: after the legend of securities, there is usually a section that outlines the basic parameters of the offer of securities. For example: 1) the number of titles put up for sale (for example. B shares, shares, etc.); and 2) the price of each security unit and the minimum purchase that an investor can make (they are sometimes required to purchase more than one unit of guarantee, unless the company accepts something else). This section also lists other essential conditions under which the company proposes this investment (for example.
B, minimum/maximum offer thresholds, expiry dates, etc.). Finally, this section often refers to other basic offer documents, such as the Private Placement Memorandum, Shareholders or the Enterprise Agreement to which the investor may be obliged to refer for more information on the offer of securities. Read below our overview of this important contract and make sure your lawyers, When setting up your own private placement offer, make sure that your subscription contract contains these important provisions: 10th acceptance section: This section specifies that the investment relationship is not binding, unless the head of the head of the head of the company accepts the subscription contract on behalf of the company, which can be granted or refused at the sole discretion of the administrator. As soon as the company accepts the agreement, the investor is bound by the subscription contract and often by the subscription contract, the enterprise contract or the shareholder contract. 7th section of compensation: this section compensates the issuing company (and often also the company manager and members). Compensation is a promise to protect or guarantee claims, claims, liability, loss, fines, costs or damages imposed on the issuer as a result of false or incomplete information provided by the investor against a claim, liability, loss, fine or compensation. This information is not limited to the information contained in the subscription agreement, but includes information contained in all documents and agreements exchanged between the investor and the company, such as the subscription contract, the enterprise contract (or shareholder agreements) and the Private Investment Memorandum. Our firm has been working in private placement offers for more than 20 years and our lawyers and consultants have written more than 5,000 private offer documents.