Document background
A Shareholder Separation Agreement is essential when a shareholder wishes to exit a company or when existing shareholders agree to part ways. This document, governed by South African law, particularly the Companies Act 71 of 2008, provides a structured framework for managing the separation process. It is commonly used in situations involving disagreements between shareholders, strategic restructuring, retirement of founding members, or when a shareholder wishes to pursue other interests. The agreement comprehensively addresses share valuation, transfer mechanics, payment terms, tax implications, and ongoing obligations of all parties. It includes crucial provisions for maintaining business continuity while protecting both the departing shareholder's and the company's interests through appropriate confidentiality and non-compete clauses. The document must comply with South African corporate law requirements and often requires consideration of B-BBEE implications.
