Subscription Agreements

Subscription agreements may be used, either before or after a company is formed, in order to bind a prospective investor or subscriber to purchase a specified amount of a company’s shares. In Florida there are very few restrictions on the form of a subscription agreement, so the agreement is flexible and can be structured according to the company’s needs. 

In Florida, executed subscription agreements are irrevocable for six months, unless the contract provides otherwise, and all the subscribers agree to the revocation. However, if the subscription agreement is with an existing company, general contract law in the State of Florida applies. Subscription agreements must be in writing and signed by the investor.  

Private companies use subscription agreements in the context of raising capital from private investors. Companies can use subscription agreements to issue and sell shares or ownership in the company or use a private placement to raise capital. For those companies that raise funds through private placement, including a subscription agreement is beneficial because it helps attract possible investors.   

However, in Florida, subscription agreements are enforceable and defaults under subscription agreements can result in conflicts and oftentimes litigation. If an investor defaults on a subscription agreement, the company may collect the amount owed under the agreement, revoke the contract and sell the shares or pursue other remedies available under the law of the State of Florida. 

Our subscription agreement lawyers advise private companies on matters related to the sale of shares to suitable private investors, and enforceability and remedies under the subscription agreements. We successfully plan and execute subscription agreements and investor suitability questionnaires. Contact us or schedule a consultation with our Miami, Florida USA corporate attorney to help you with all your subscription agreement needs.