Shareholder Subscription Agreement
Raising investment? Share subscription and shareholders agreements drafted to protect founders and close rounds faster.
- Founder-Side Drafting
- Faster Round Closure
- Control Mapped Clearly
What is Shareholder Subscription Agreement?
When investors put money into your company, two documents govern everything: the Share Subscription Agreement (SSA — how shares are issued: price, tranches, conditions precedent, warranties) and the Shareholders Agreement (SHA — how the company runs after: board rights, reserved matters, anti-dilution, exit rights). Together they decide how much control you keep of the company you built.
Taxwapsi's corporate lawyers draft and negotiate these from the founder's side: clean representations and warranties with disclosure schedules, sensible liability caps, balanced reserved matters (investor protection without operational paralysis), founder vesting and lock-ins you can live with, and exit mechanics — ROFR, tag-along, drag-along thresholds and liquidation preferences — at market-standard, not investor-maximal, terms.
We also handle the company-law mechanics that make the round legally complete: valuation report coordination, board/shareholder resolutions, PAS-4/PAS-3 private placement filings, share certificates and AOA amendments mirroring the SHA.
Expert Pro Tip
Whatever the SHA says, enforceability in India is strongest when key clauses are mirrored into the Articles of Association — courts have repeatedly favoured the AOA over an unincorporated SHA term. Never close a round without the AOA amendment.
Choose Your Package
Transparent pricing — professional fee shown, government fees extra where noted.
Starter
Investor-draft review with founder-side redline.
All Inclusive
Get StartedWhat you'll get
- SSA + SHA clause-by-clause review
- Founder risk note in plain language
- Negotiation points with market benchmarks
- One redline round
- Lawyer consultation call
Standard
Full SSA + SHA drafting & negotiation.
All Inclusive
Get StartedWhat you'll get
- Everything in Starter
- SSA + SHA drafted founder-side
- Disclosure schedules preparation
- Up to 3 negotiation rounds
- Term sheet advisory
- AOA amendment drafting
Pro
Round closure end-to-end incl. filings.
+ Govt. Fee
Get StartedWhat you'll get
- Everything in Standard
- Valuation report coordination
- Board/EGM resolutions + PAS-4
- PAS-3 allotment filing
- Share certificates & registers
- FC-GPR (foreign investor) if needed
- Dedicated transaction lawyer
* Timelines depend on government processing. T&C apply.
Benefits of Shareholder Subscription Agreement
Founder-Side Drafting
Terms negotiated from your side of the table — liquidation preference, anti-dilution and vesting at market standards.
Faster Round Closure
Clean documents and disclosure schedules cut investor-counsel back-and-forth by weeks.
Control Mapped Clearly
Board composition, reserved matters and information rights balanced so you can still run the company.
Warranty Risk Capped
Representations with materiality qualifiers, disclosure schedules and liability caps — personal founder exposure minimised.
Company-Law Complete
Private placement (Sec 42), PAS-3 allotment and AOA amendment handled — the round is legally airtight.
Future-Round Ready
ESOP pool, pre-emptive rights and next-round mechanics structured so Series A doesn't require unwinding the seed.
How It Works — Step by Step
- 1
Term Sheet ReviewDay 1
Investor term sheet analysed clause-by-clause; negotiation positions identified.
- 2
SSA & SHA DraftingDay 2–4
Both agreements drafted (or investor drafts marked up) with disclosure schedules.
- 3
Negotiation RoundsDay 5–6
Redlines exchanged with investor counsel; we drive to market-standard positions.
- 4
Company Law MechanicsDay 7
Valuation report, board/EGM resolutions, PAS-4 offer letter and AOA amendment prepared.
- 5
Closing & FilingsDay 8
Execution, funds receipt, share allotment, PAS-3 filing and share certificates issued.
Documents Required
Prepare your documents in the order below — start with Document 1 and move down the list.
Deal Documents
- 1
Term SheetRequired
Signed or draft term sheet from the investor.
- 2
Cap TableRequired
Current shareholding including ESOP pool and any convertibles.
- 3
Valuation ReportIf applicable
Registered valuer/merchant banker report — we coordinate if pending.
Company Documents
- 4
COI, MOA & AOARequired
Constitutional documents for consistency and amendment.
- 5
Financial StatementsRequired
For warranties and disclosure schedules.
- 6
Material Contracts & IPIf applicable
Key agreements and IP registrations referenced in diligence/warranties.
Frequently Asked Questions
What is the difference between SSA and SHA?
The SSA governs the investment transaction itself — share price, tranches, conditions precedent, closing actions and warranties. The SHA governs the ongoing relationship — board rights, reserved matters, transfer restrictions, exits. Most rounds sign both simultaneously (sometimes combined as an SSHA).
What are reserved matters and how many are reasonable?
Decisions needing investor consent — new shares, debt beyond limits, M&A, budgets, key hires. Seed-stage lists of 10–15 genuinely material items are market; 40-item lists that need investor sign-off to buy a laptop are not. We negotiate the list hard because it defines your operating freedom.
What is liquidation preference?
On exit/liquidation, investors take their money back (1x non-participating is market standard in India) before remaining proceeds distribute. Participating preference ("double dip") and >1x multiples are aggressive — we flag and negotiate them.
What is anti-dilution protection?
If a future round prices lower (down round), the investor's effective price adjusts — broad-based weighted average is the fair market standard; full-ratchet (reprice to the new low) is harsh on founders. The formula choice matters enormously in bad scenarios.
Should founders give personal warranties?
Founders typically give warranties about the company, capped (commonly at amounts linked to investment or salary multiples) and qualified by disclosure schedules. Unlimited personal warranty exposure is non-market — we cap and qualify systematically.
What are drag-along and tag-along rights?
Tag-along lets minority shareholders join a majority sale at the same price (protects investors). Drag-along lets a supermajority force everyone into a sale (enables exits). Thresholds, price floors and carve-outs determine whether these are fair — standard negotiation points for us.
What filings make the share issue legal?
Private placement under Section 42/62: valuation report, special resolution (MGT-14), offer letter PAS-4, allotment within 60 days of funds, PAS-3 filing within 15 days, stamped share certificates, and register updates. For foreign investors, FEMA reporting (FC-GPR) within 30 days. All included in our Pro scope.
The investor sent their standard documents. Just sign?
Never unread — "standard" drafts open at investor-maximal positions on preference, vesting, exit rights and warranties. A founder-side review typically improves 10–20 material points. Our review-only option exists precisely for this.
What Our Clients Say
4.6/5(2,000+ reviews)Our trademark got objected and we were clueless. Their IP attorney drafted a brilliant reply — mark accepted and published within months.
My freelancer agreement now has milestone payments and IP-on-full-payment. A client who used to delay invoices paid in 4 days this time.
My Pvt Ltd was registered in 12 days flat. Every step explained, pricing exactly as quoted, and the post-incorporation kit covered everything. Highly recommended.
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