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Share Sale Agreement for Saudi Arabia

Share Sale Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that documents the terms and conditions for the sale and purchase of shares in a company. The agreement includes detailed provisions covering the transaction structure, purchase price, conditions precedent, warranties, representations, and closing mechanics, all compliant with Saudi Companies Law and related regulations. It addresses specific Saudi legal requirements such as regulatory approvals, Zakat considerations, and appropriate dispute resolution mechanisms under Saudi jurisdiction. The document serves as the primary transaction document for share transfers in Saudi Arabia, incorporating necessary provisions for both local and international parties.

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What is a Share Sale Agreement?

The Share Sale Agreement is a critical legal document used in Saudi Arabia for transferring ownership of shares in a company from one party to another. It is essential for both private and public company transactions, though different regulatory requirements may apply depending on the company type. The agreement must comply with Saudi Companies Law, Capital Market Law (for listed companies), and other relevant regulations including foreign investment laws where applicable. It typically includes comprehensive details about the transaction structure, warranties, representations, conditions precedent, and closing mechanics. The document is particularly important in the Saudi context due to specific local requirements such as Ministry of Commerce approvals, Zakat considerations, and the need for certain provisions to be enforceable under Saudi law. Share Sale Agreements are commonly used in various scenarios including corporate restructurings, exit transactions, and strategic investments.

What sections should be included in a Share Sale Agreement?

1. Parties: Identification of the Seller(s) and Buyer(s) with full legal names and details as required under Saudi law

2. Background: Context of the transaction, description of the target company and share ownership

3. Definitions and Interpretation: Key terms used throughout the agreement and interpretation rules

4. Sale and Purchase: Core transaction terms including number of shares, price, and payment mechanisms

5. Conditions Precedent: Required approvals, consents and actions needed before closing, including any regulatory requirements

6. Pre-Closing Obligations: Parties' obligations between signing and closing, including conduct of business requirements

7. Closing: Closing mechanics, deliverables and timing

8. Seller Warranties: Standard and specific warranties regarding the shares, company and business

9. Buyer Warranties: Basic warranties regarding capacity and authority to enter into the transaction

10. Tax Matters: Tax and Zakat-related provisions, including allocations and indemnities

11. Confidentiality: Confidentiality obligations regarding the transaction and company information

12. Announcements: Requirements for public announcements and press releases

13. Notices: Process for formal communications between parties

14. Governing Law and Disputes: Saudi law as governing law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and counterparts

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

1. Price Adjustment: Mechanisms for post-closing price adjustments, used when price depends on closing accounts or other variables

2. Non-Competition: Restrictions on seller's competing activities, included when seller is an individual or operating entity

3. Transitional Services: Arrangements for post-closing services by seller, needed when business continuity requires seller's involvement

4. Employee Matters: Specific provisions regarding employees, needed when transaction affects employment arrangements

5. Intellectual Property: Special IP provisions, required when IP is a significant asset

6. Real Estate: Specific provisions for company's real estate, needed when property holdings are material

7. Break Fee: Provisions for payment if deal fails, used in higher-value transactions

8. Foreign Investment Provisions: Additional provisions required when buyer is a foreign entity

What schedules should be included in a Share Sale Agreement?

1. Share Details: Details of shares being transferred including share certificates numbers and ownership history

2. Company Information: Key details about the target company including corporate documents and structure

3. Warranties: Detailed warranties and any agreed qualifications or disclosures

4. Properties: List and details of company's real estate assets

5. Material Contracts: List and copies of key contracts

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

7. Closing Deliverables: Detailed list of documents and actions required at closing

8. Form of Resignation Letters: Template resignation letters for departing directors

9. Form of Corporate Resolutions: Template board and shareholder resolutions required for the transaction

10. Regulatory Approvals: List of required governmental and regulatory approvals

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

Saudi Arabia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions










Clauses





































Relevant Industries

Financial Services

Manufacturing

Real Estate

Technology

Healthcare

Retail

Energy

Transportation

Construction

Professional Services

Telecommunications

Education

Hospitality

Mining

Agriculture

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Tax

Strategy

Corporate Secretariat

Risk Management

Treasury

Business Development

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Secretary

Head of Legal

Head of Mergers & Acquisitions

Investment Director

Corporate Development Manager

Financial Controller

Legal Counsel

Company Director

Board Member

Investment Manager

Transaction Manager

Compliance Officer

Due Diligence Manager

Integration Manager

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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