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A Subscription letter is a formal agreement used in Malaysian business transactions where investors commit to buying shares or securities in a company. It outlines key details like the number of shares, purchase price, and payment terms, serving as a binding contract between the investor and the issuing company.

Under Malaysian securities law, these letters play a crucial role in capital raising, particularly for private placements and initial public offerings (IPOs). They help companies document investor commitments while ensuring compliance with Securities Commission Malaysia guidelines and the Companies Act 2016, protecting both parties' interests throughout the investment process.

Use a Subscription letter when raising capital through share offerings in Malaysia, especially for private placements or IPOs. This document becomes essential the moment investors express serious interest in purchasing company shares, as it formally records their commitment and establishes clear terms.

Companies need Subscription letters during fundraising rounds, share issuances to new shareholders, or when converting debt to equity. The timing is particularly critical for compliance with Securities Commission Malaysia requirements and the Companies Act 2016. Having this document in place protects both parties and streamlines the investment process, particularly when dealing with multiple investors or complex share structures.

• Basic Share Subscription: The standard format used for straightforward share purchases, typically containing essential terms and payment details
• IPO Subscription: Specifically designed for initial public offerings, with additional regulatory compliance elements required by Bursa Malaysia
• Private Placement Subscription: Used for exclusive share offerings to selected investors, including specific qualifying criteria and investment restrictions
• Convertible Note Subscription: Combines debt-to-equity conversion terms with standard subscription elements
• Rights Issue Subscription: Tailored for existing shareholders exercising their pre-emptive rights to purchase new shares

• Company Directors: Authorize and sign Subscription letters on behalf of the issuing company, ensuring terms align with corporate strategy
• Investors: Review and execute the letter to formally commit to purchasing shares, including individual, institutional, or corporate investors
• Corporate Lawyers: Draft and review the letters to ensure compliance with Malaysian securities laws and protect client interests
• Company Secretaries: Handle documentation, filing, and maintain records of share subscriptions for corporate compliance
• Investment Bankers: Coordinate the subscription process during IPOs or private placements, liaising between companies and investors

• Company Details: Gather accurate corporate information, including registration number, registered address, and authorized share capital
• Share Information: Define share class, quantity, price per share, and total subscription amount
• Investor Details: Collect complete subscriber information, including identification documents and proof of funds
• Payment Terms: Specify payment schedule, methods, and any conditions precedent
• Board Approval: Obtain necessary corporate authorizations and board resolutions
• Legal Requirements: Check Securities Commission Malaysia guidelines and Companies Act compliance for your specific offering type

• Parties' Details: Full legal names, registration numbers, and addresses of the company and subscriber
• Share Specifics: Number, class, and price of shares being subscribed for
• Payment Terms: Clear payment schedule, method, and bank account details
• Representations: Subscriber's confirmation of eligibility and financial capacity
• Conditions Precedent: Any requirements before shares can be issued
• Governing Law: Explicit reference to Malaysian law and jurisdiction
• Execution Block: Proper signature sections for all parties, with witness requirements

A Subscription letter differs significantly from an Acceptance Letter in both purpose and legal effect within Malaysian business transactions. While both documents formalize agreements, their applications and implications are distinct.

• Primary Purpose: Subscription letters specifically commit investors to purchasing company shares, while Acceptance letters broadly confirm agreement to various types of business proposals or offers
• Legal Framework: Subscription letters must comply with Securities Commission Malaysia regulations and Companies Act 2016 requirements for share issuance; Acceptance letters have more flexible legal requirements
• Content Requirements: Subscription letters need detailed share information, payment terms, and investor qualifications; Acceptance letters typically contain simpler terms of agreement
• Binding Effect: Subscription letters create immediate financial obligations and equity rights; Acceptance letters may or may not create immediate binding obligations depending on context