Document background
The Common Stock Subscription Agreement is a crucial document used in Canadian corporate finance when a company issues shares of its common stock to investors. This agreement is typically employed during capital raising activities, whether for startup funding, business expansion, or other corporate purposes. The document serves multiple functions: it formalizes the investment terms, ensures compliance with Canadian securities regulations, documents the investor's sophistication and eligibility, and establishes the rights and obligations of both the issuing company and the subscriber. The agreement must conform to both federal and provincial requirements, including the Canada Business Corporations Act and applicable provincial securities legislation. It includes essential details such as the subscription price, number of shares, representations and warranties, and closing conditions. This document is particularly important for private placements and other exempt market transactions where shares are issued without a prospectus.
