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Sales Of Shares Agreement

Sales Of Shares Agreement Template for South Africa

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Key Requirements PROMPT example:

Sales Of Shares Agreement

"I need a Sales Of Shares Agreement for the sale of 60% shareholding in a technology startup company, with an earn-out provision based on performance targets through 2025 and specific warranties about intellectual property rights."

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Document background
The Sales Of Shares Agreement is a crucial legal document used in South African business transactions for transferring ownership of company shares from one party to another. This agreement is essential when selling either a minority or majority shareholding in a company and must comply with South African legislation, particularly the Companies Act 71 of 2008, Securities Transfer Tax Act, and relevant exchange control regulations. The document typically includes detailed provisions on share valuation, payment mechanisms, warranties about the company's status and operations, and conditions precedent to the transaction's completion. It's particularly important in private company transactions where shares aren't publicly traded, and requires careful consideration of tax implications, regulatory approvals, and potential restrictions on share transfers in the company's memorandum of incorporation.
Suggested Sections

1. Parties: Identification and details of the Seller and Purchaser

2. Background: Context of the transaction including description of the company whose shares are being sold

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Sale and Purchase: Core transaction terms including the number and class of shares being sold

5. Purchase Price: Agreed price for the shares and valuation methodology if applicable

6. Payment Terms: Method, timing and currency of payment, including any installment arrangements

7. Conditions Precedent: Conditions that must be fulfilled before the agreement becomes effective

8. Completion: Details of the closing process, timing, and deliverables

9. Seller's Warranties: Warranties regarding the shares, company, and seller's capacity

10. Purchaser's Warranties: Warranties regarding the purchaser's capacity and authority

11. Pre-completion Obligations: Obligations of parties between signing and completion

12. Confidentiality: Provisions regarding confidential information and announcements

13. Notices: How formal notices under the agreement must be given

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, etc.

Optional Sections

1. Security for Payment: Required when payment is deferred or in installments

2. Tax Indemnities: Detailed tax-related protections, particularly relevant for large transactions

3. Non-competition: Restrictions on seller's future business activities, if agreed

4. Employee Matters: Required when specific arrangements for key employees are part of the transaction

5. Earn-out Provisions: When part of purchase price is contingent on future performance

6. Break Fee: Compensation if transaction fails under specific circumstances

7. Transitional Services: When seller agrees to provide post-completion support

8. Third Party Consents: When transaction requires specific third party approvals

Suggested Schedules

1. Share Details: Detailed description of shares being sold including share certificates

2. Company Information: Key company details including financial statements and material contracts

3. Warranties: Detailed warranties and representations

4. Completion Requirements: Detailed list of completion deliverables and actions

5. Encumbrances: List of any existing encumbrances on the shares

6. Required Consents: List of required regulatory and third-party consents

7. Intellectual Property: Schedule of company's intellectual property rights

8. Properties: Details of company's real estate holdings if material to transaction

Authors

Alex Denne

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

alex.den.21@genieai.co
Relevant legal definitions

















































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Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Mining

Retail

Professional Services

Healthcare

Agriculture

Energy

Telecommunications

Construction

Education

Transportation

Media and Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Tax

Compliance

Risk Management

Executive Management

Company Secretariat

Treasury

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Lawyer

Company Secretary

Finance Director

Mergers & Acquisitions Manager

Investment Banker

Due Diligence Specialist

Tax Advisor

Corporate Finance Manager

Business Development Director

Compliance Officer

Risk Manager

Transaction Advisory 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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