Document background
The Subscription And Shareholders Agreement is a fundamental document used in Saudi Arabian corporate transactions when new investors are entering a company while simultaneously establishing long-term governance arrangements. It serves dual purposes: facilitating the subscription of new shares and setting out the ongoing relationship between shareholders. This document is particularly crucial in private equity investments, joint ventures, and growth capital scenarios where new shareholders are investing in existing companies. The agreement must comply with Saudi Arabian Companies Law, Capital Market Regulations, and where applicable, foreign investment regulations. It typically includes detailed provisions covering share subscription mechanics, payment terms, warranties, board representation rights, reserved matters, share transfer restrictions, and exit provisions. The document is essential for protecting both majority and minority shareholders' interests while ensuring compliance with local legal requirements and market practices.
