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Share Sell Agreement for Hong Kong

Share Sell Agreement Template for Hong Kong

A comprehensive legal agreement governed by Hong Kong law that documents the terms and conditions for the sale and purchase of shares in a company. The agreement sets out the purchase price, payment terms, warranties, representations, and other key conditions of the share transfer. It includes detailed provisions for completion mechanics, seller's warranties about the company's condition, limitations on liability, and post-completion obligations. The document ensures compliance with Hong Kong's Companies Ordinance and other relevant legislation, providing legal protection for both parties and clarity on their respective rights and obligations throughout the transaction process.

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What is a Share Sell Agreement?

The Share Sale Agreement is a crucial document used in corporate transactions under Hong Kong law when transferring ownership of shares from one party to another. It is typically employed in private company acquisitions, corporate restructurings, or investment exits. The agreement comprehensively documents the commercial terms of the transaction, including the purchase price mechanism, conditions precedent to completion, warranties about the company's business and financial position, and post-completion obligations of the parties. It must comply with Hong Kong's Companies Ordinance, Stamp Duty Ordinance, and other relevant regulations. The document serves multiple purposes: it creates legally binding obligations between the parties, provides a framework for completing the transaction, allocates risk between buyer and seller through warranties and indemnities, and serves as evidence of the transfer for regulatory purposes. The agreement's complexity and content typically vary based on the transaction size, industry sector, and specific risks identified during due diligence.

What sections should be included in a Share Sell Agreement?

1. Parties: Identification of the seller(s) and buyer(s) with full legal names and addresses

2. Background: Context of the transaction, including details of the target company and ownership of shares being sold

3. Definitions: Key terms used throughout the agreement defined for clarity and consistency

4. Sale and Purchase: Core transaction terms including the shares being sold and purchase price

5. Consideration: Details of the purchase price, payment terms, and any adjustments

6. Completion: Timing, location, and mechanics of completion, including actions required by each party

7. Seller's Warranties: Representations and warranties given by the seller regarding the shares and company

8. Buyer's Warranties: Basic warranties from the buyer regarding capacity and authority to enter the transaction

9. Limitations on Liability: Caps, time limits and other restrictions on the seller's liability under the warranties

10. Confidentiality: Obligations regarding transaction confidentiality and company information

11. Announcements: Restrictions and requirements for public announcements about the transaction

12. Further Assurance: Obligations to take additional actions needed to give effect to the agreement

13. Assignment: Restrictions on transfer of rights under the agreement

14. Notices: Process and requirements for formal notices under the agreement

15. General Provisions: Standard boilerplate clauses including entire agreement, variations, severability

16. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction of Hong Kong courts

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

1. Pre-Completion Obligations: Used when there is a gap between signing and completion, specifying how the business should be conducted during this period

2. Non-Competition: Include when the seller needs to be restricted from competing with the business post-sale

3. Tax Covenant: Detailed tax indemnity from seller to buyer, typically included for larger transactions

4. Earn-out Provisions: Include when part of the purchase price is contingent on future performance

5. Employee Matters: Used when specific arrangements are needed regarding key employees or management

6. Intellectual Property Rights: Important when the company's IP is a significant asset requiring specific provisions

7. Real Estate Matters: Include when the company owns significant property assets requiring specific warranties

8. Data Protection: Required when significant personal data processing is involved in the business

What schedules should be included in a Share Sell Agreement?

1. Details of the Company: Corporate information including registration details, directors, and share capital structure

2. Conditions Precedent: List of conditions that must be satisfied before completion

3. Completion Requirements: Detailed list of documents and actions required at completion

4. Warranties: Full set of seller's warranties about the company and business

5. Properties: Details of any real estate owned or leased by the company

6. Intellectual Property: List of IP rights owned or used by the company

7. Material Contracts: Summary of key commercial contracts

8. Employee Information: Details of employees and their terms of employment

9. Completion Accounts: Format and principles for any completion accounts adjustments

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions


































Clauses





























Relevant Industries

Financial Services

Technology

Manufacturing

Real Estate

Retail

Professional Services

Healthcare

Education

Construction

Hospitality

Media and Entertainment

Transportation and Logistics

Energy and Utilities

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Risk Management

Board of Directors

Executive Leadership

Company Secretarial

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Legal Counsel

Company Secretary

Investment Director

Mergers & Acquisitions Director

Business Development Manager

Finance Director

Risk Manager

Compliance Officer

Corporate Development Manager

Investment Banker

Private Equity Manager

Board Director

Managing Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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