TLDR:
A Subscription Agreement is a contract under which an investor commits to purchase newly issued securities directly from the issuing company. Unlike a Share Purchase Agreement (which governs the transfer of existing shares between shareholders), a Subscription Agreement governs primary issuances where the company creates new shares and receives the purchase price as capital.
When Subscription Agreements Are Used
Subscription Agreements are the standard document for: primary equity financings (Series A, B, C—new investors subscribing to newly-created preferred shares), private placements of debt or convertible securities, fund investments (LPs subscribing to fund interests), and increasingly tokenized securities offerings. They are distinct from secondary purchases where existing shareholders sell their shares to new investors (governed by SPAs or stock transfer agreements).
Standard Provisions
A typical Subscription Agreement includes: securities being issued (class, series, number, rights), purchase price and payment terms, investor representations (accredited investor / nitelikli yatırımcı status, sophistication, no general solicitation, restricted securities understanding), company representations (corporate authority, no conflict, securities law compliance), closing mechanics, transfer restrictions and legend requirements, signature and execution provisions. The agreement typically incorporates by reference the Articles of Incorporation/Bylaws and any Investor Rights Agreement governing ongoing relationship.
Securities Law Compliance
Subscription Agreements drive securities law compliance: in the US, the investor representations support the issuer’s exemption from Securities Act registration (typically Rule 506(b) or 506(c) under Regulation D); the EU Prospectus Regulation exemptions are similarly evidenced through subscription agreement provisions; Turkish SPK regulations for non-public offerings require analogous documentation. Failure to obtain proper investor representations or to follow exemption requirements creates rescission risk—investors can require return of their investment plus interest. Sophisticated subscription agreements include detailed compliance certifications, accredited investor verification mechanisms, and warranties from investors about their status.