Document background
The Convertible Note Contract is a crucial financing instrument in the Philippine business landscape, particularly for startups and growing companies seeking flexible funding options. This document type emerged as a popular alternative to straight equity investment, offering companies a way to defer valuation discussions while securing immediate funding. Under Philippine law, these agreements must comply with the Securities Regulation Code (RA 8799) and relevant SEC regulations, particularly regarding securities issuance and investor protection. The contract typically includes essential elements such as principal amount, interest rate, maturity date, conversion mechanisms, and valuation parameters, while also addressing specific Philippine regulatory requirements such as foreign ownership restrictions where applicable. The Convertible Note Contract serves as a bridge between seed funding and larger equity rounds, providing both companies and investors with clearly defined rights and obligations within the Philippine legal framework.
