Share Subscription Letter

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What is it?

A Share Subscription Letter is a document that is executed by a party wishing to subscribe for shares in a company.

A Share Subscription Letter sets out the number of shares requested, the price that will be paid for the shares, and the method of payment.

Why do you need it?

A Share Subscription Letter is a formal request to apply for an allotment of shares in a company. While it is not mandatory, it is good practice to request that prospective investors document their application for the shares in the form of a Share Subscription Letter.

If required, the letter may also provide an undertaking on the part of the prospective investor to pay the subscription monies for such shares either in full and on demand or by attaching a proof of payment to the letter.

Key clauses to watch for:

When drafting a Share Subscription Letter, it is important to focus on a number of key clauses, in particular.

  • Prospective shareholder's personal information;
  • Information about the company being invested in;
  • Description of the shares to be allotted; and
  • Details of payment for the shares.

Share Subscription Letter Document

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