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Stock Redemption Agreement Template for Malaysia

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Key Requirements PROMPT example:

Stock Redemption Agreement

"I need a Stock Redemption Agreement for my Malaysian technology company to repurchase 10,000 ordinary shares from a retiring founder at RM 25 per share, with completion scheduled for March 15, 2025."

Document background
A Stock Redemption Agreement is a crucial document used when a Malaysian company wishes to repurchase its own shares from existing shareholders. This type of agreement is commonly utilized in scenarios such as shareholder exits, capital restructuring, or implementing employee share schemes. The document must comply with the Companies Act 2016 and other relevant Malaysian legislation, including specific requirements for share capital reduction and maintenance of capital rules. The agreement typically includes detailed provisions for valuation, payment mechanisms, regulatory compliance, and completion procedures. It's particularly important in private companies where share transfers need to be carefully controlled and documented.
Suggested Sections

1. Parties: Identification of the company and the selling shareholder(s)

2. Background: Context of the agreement, including current shareholding structure and reason for redemption

3. Definitions: Key terms used throughout the agreement including Share Price, Completion Date, and Encumbrances

4. Agreement to Redeem: Core terms of the redemption including number of shares and price per share

5. Payment Terms: Details of how and when payment will be made for the redeemed shares

6. Conditions Precedent: Prerequisites that must be satisfied before the redemption can proceed

7. Completion: Process and requirements for completing the redemption transaction

8. Representations and Warranties: Statements of fact and assurances from both parties

9. Compliance with Law: Confirmation of compliance with Companies Act 2016 and other relevant legislation

10. Confidentiality: Obligations regarding confidential information

11. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

Optional Sections

1. Multiple Shareholders Provisions: Additional terms when multiple shareholders are involved in the redemption

2. Installment Payment Terms: Detailed payment schedule when redemption price is paid in installments

3. Tax Provisions: Specific arrangements regarding tax implications and responsibilities

4. Share Valuation Mechanism: Process for determining share value if not pre-agreed

5. Right of First Refusal: Terms giving other shareholders priority if redemption doesn't proceed

6. Non-Competition Provisions: Restrictions on selling shareholder's future business activities

7. Dispute Resolution: Alternative dispute resolution procedures beyond court jurisdiction

Suggested Schedules

1. Share Details: Specific information about shares being redeemed including share numbers and certificates

2. Calculation of Redemption Price: Formula or method used to determine the redemption price

3. Required Corporate Approvals: List of necessary board and shareholder resolutions

4. Completion Checklist: List of documents and actions required for completion

5. Form of Share Transfer: Template for share transfer documentation

6. Company Financial Statements: Relevant financial information supporting the redemption

Authors

Alex Denne

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

Relevant legal definitions


























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Relevant Industries

Financial Services

Professional Services

Manufacturing

Technology

Real Estate

Retail

Healthcare

Energy

Telecommunications

Construction

Mining

Agriculture

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Treasury

Board of Directors

Corporate Development

Investment

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Finance Manager

Financial Controller

Board Director

Compliance Officer

Investment Manager

Corporate Treasurer

Share Registrar

Finance 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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