This is an agreement between an investor and a corporation whereby the corporation
promises that it will sell the investor a certain number of shares at a set price. This
particular agreement is used to subscribe to shares of a corporation that has not been
fully incorporated yet. Share subscription agreements are useful because they help the
corporation gauge investor interest and helps determine the initial price per share. This
agreement should be used by investors or by small businesses that want to offer a
certain number of shares for subscription before a corporation is incorporated.
Pre-Incorporation Stock Subscription Agreement
This Pre-Incorporation Stock Subscription Agreement is made effective this
day of ______________, ____, between _________________________ (the “Promoter”) and
______________________________________________________ (the “Subscriber”);
RECITALS:
A. Promoter plans to organize a corporation, to be named ________________, to be
incorporated in the State of ___________ (the “Company”);
B. The planned initial stock offering shall be _____ shares, of Common Stock, with a par
value of $______ per share; and
C. Subscriber desires to subscribe to purchase shares of Common Stock of the Company,
as described below;
NOW, THEREFORE, in consideration of the mutual covenants, warranties and
representations contained herein, the parties hereby agree as follows:
1. Subscriber agrees to purchase ____________shares of Common Stock upon issuance.
In the event that the offering is over subscribed, the Subscriber shall be entitled to a proportional
purchase of shares.
2. Subscriber acknowledges that the shares purchased have not been registered with the
Securities and Exchange Commission, nor the Securities Commission of any state.
3. The Subscriber represents that it is qualified under the relevant rules and regulations of
the Securities and Exchange Commission and the Securities Commission of any state which may
have jurisdiction to purchase these shares. Subscriber is experienced and knowledgeable in
financial and business matters, capable of evaluating the merits and risks of purchasing securities
of the Company.
4. The Subscriber further represents that it is not purchasing these shares with an
intention of resale, nor will it take any actions that may result in it being considered an
underwriter of the shares.
5. Prior to any sale or transfer of the shares, the Subscriber shall provide to the Company
a legal opinion, in a form acceptable to the counsel for the Company, that the transfer will not
result in the loss of the exemptions from registration of the securities then claimed by the
Company.
6. The Subscriber further represents that it has had the opportunity to ask questions of,
and receive answers from, the Promoter and the officers and directors of the Company
concerning the terms and conditions of the investment and the proposed business and affairs of
the Company and to obtain any additional information necessary to verify such information, and
Subscriber has received such additional information concerning the Company as Subscriber
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considers necessary or advisable in order to form a decision concerning an investment in the
Company.
7. The Subscriber agrees that, prior to delivery of the shares; it will execute the
Shareholders Agreement dated _____________, 20__.
8. Upon execution of this agreement, the Subscriber shall pay to Promoter the sum of
$________, which shall be used for an organizational fund for the expenses of incorporation.
The balance shall be due upon issuance of the shares.
9. This Agreement, and all exhibits hereto, along with any other documents or
agreements expressly referred to herein, constitutes the entire agreement between the parties with
respect to the subject matter hereof. This Agreement supersedes all previous agreements between
the parties with respect to the subject matter hereof. There are no agreements, representations or
warranties between or among the parties other than those set forth in this Agreement or in the
documents or agreements referred to herein.
10. No amendment, modification, or supplement to this Agreement shall be binding on
any of the parties unless it is in writing and signed by the parties in interest at the time of the
modification.
11. If any term or provision of this Agreement is determined to be illegal or
unenforceable, such illegal or unenforceable provision shall be stricken from this Agreement,
and shall not affect the legality or unenforceability of this Agreement.
12. If either party to this Agreement shall bring any action, suit, arbitration, or other
proceeding against the other, declaratory or otherwise, to enforce the terms hereof or to declare
rights hereunder, the party prevailing in such action or proceeding shall be entitled to recover
attorneys' fees and costs incurred in prosecuting or defending the action or proceeding, and in
enforcing any jud