Share Subscription Agreement (SSA)

A Share Subscription Agreement is the transactional document that gives legal effect to the actual investment — the issuance of new shares by the company to the investor in exchange for capital. While the Shareholders' Agreement governs how parties will behave going forward, the SSA is the instrument that transfers money and creates the new shareholding.

The SSA specifies the number and class of shares being issued, the subscription price, the total investment amount, conditions precedent to closing (such as regulatory approvals, due diligence completion, or existing shareholder consents), representations and warranties from both the company and the investor, and the timeline for completion and share certificate issuance.

In Indian practice, the SSA and SHA are typically executed together at closing. For CCPS (Compulsorily Convertible Preference Shares) — the most common instrument for Indian VC deals — the SSA also describes conversion mechanics, anti-dilution adjustments, and dividend preferences. For foreign investors, the SSA must comply with FEMA's Foreign Direct Investment rules, including pricing guidelines under the Discounted Cash Flow or Net Asset Value method, and triggers the FC-GPR filing obligation within 30 days of receiving funds.

Founders should treat representations and warranties carefully. Broad or absolute reps — without knowledge qualifiers — can expose founders to indemnification claims long after the deal closes if undisclosed liabilities surface.