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Share Issue Agreement for Malaysia

Share Issue Agreement Template for Malaysia

A Share Issue Agreement under Malaysian law is a legally binding document that formalizes the issuance of new shares by a company to subscribers. The agreement details the terms and conditions of the share issuance, including the number and class of shares, subscription price, payment terms, and completion mechanics. It incorporates necessary compliance elements with the Malaysian Companies Act 2016 and relevant securities regulations, while also addressing representations, warranties, and conditions precedent to protect both the issuing company and the subscribers. The document typically includes provisions for regulatory compliance, shareholder rights, and corporate governance requirements specific to the Malaysian jurisdiction.

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What is a Share Issue Agreement?

A Share Issue Agreement is essential when a Malaysian company seeks to increase its share capital by issuing new shares to investors or existing shareholders. This document is commonly used in various corporate scenarios, including capital raising, employee share schemes, or strategic investments. The agreement must comply with the Malaysian Companies Act 2016, Capital Markets and Services Act 2007, and relevant Securities Commission guidelines. It typically outlines the complete transaction structure, from subscription details to completion requirements, while incorporating necessary protections for all parties involved. The document is particularly important in Malaysia's dynamic business environment, where companies frequently seek capital injection for growth and expansion. A Share Issue Agreement serves as the primary document evidencing the terms of share subscription and ensuring proper documentation for corporate and regulatory compliance.

What sections should be included in a Share Issue Agreement?

1. Parties: Identification of the Company issuing shares and the Subscriber(s) purchasing the shares

2. Background: Context of the share issuance, including company information and purpose of the share issue

3. Definitions: Key terms used throughout the agreement

4. Subscription Details: Number, class, and price of shares being issued

5. Payment Terms: Details of payment including timing, method, and bank details

6. Completion: Process and requirements for completing the share issuance

7. Company's Representations and Warranties: Company's confirmations regarding its authority, share capital, and compliance

8. Subscriber's Representations and Warranties: Subscriber's confirmations regarding capacity, funding source, and compliance

9. Conditions Precedent: Prerequisites that must be satisfied before completion

10. Confidentiality: Obligations regarding confidential information

11. Notices: Process for formal communications between parties

12. General Provisions: Standard boilerplate clauses including governing law, assignment, and amendments

What sections are optional to include in a Share Issue Agreement?

1. Pre-emptive Rights: Required if existing shareholders have rights of first refusal on new share issues

2. Anti-dilution Protection: Include when investors require protection against future dilutive share issues

3. Tag-Along Rights: Include when minority shareholders need protection in case of majority share sales

4. Board Appointment Rights: Include when the share issue comes with board representation rights

5. Regulatory Compliance: Required for public companies or when specific regulatory approvals are needed

6. Share Transfer Restrictions: Include when there are specific limitations on future share transfers

7. Dividend Rights: Include when special dividend rights attach to the newly issued shares

What schedules should be included in a Share Issue Agreement?

1. Share Capital Structure: Details of the company's share capital before and after the issuance

2. Subscription Form: Form to be completed by the subscriber confirming the share subscription

3. Board Resolution: Copy of board resolution approving the share issuance

4. Shareholders' Resolution: Copy of shareholders' resolution if required for the share issuance

5. Disclosure Schedule: Details of any disclosures against the warranties

6. Completion Checklist: List of actions and documents required for completion

7. Share Certificate Specimen: Sample of the share certificate to be issued

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Malaysia

Publisher

Genie AI

Document Type

Stock Agreement

Cost

Free to use

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