Sale of Shares Agreement – in total, to a non-shareholder

SALE OF SHARES AGREEMENT

In total, to a non-shareholder

Summary A Sale of Shares Agreement may be used when a shareholder sells all their equity to a purchaser, where the purchaser is not an existing shareholder of the business. A contract for the sale of shares includes reference to due diligence and warranties, amongst other detailed provisions. The Agreement caters for more than one Shareholder selling their shares, if applicable.

Why do I need a contract to sell shares? A written contract for selling shares sets out the terms of the sale of a shareholder’s equity. A number of issues need to be negotiated during a Company’s sale of equity, such as the purchase price, the due diligence process, the handover process, confidentiality, restraints and warranties. These issues need to be included in the Sale of Shares Agreement to eliminate uncertainty and ensure that both sellers and the purchaser understand their respective rights and obligations during the sale.

What does the agreement say? This sample agreement consists of: Parties; Definitions; Sale of equity; Suspensive Conditions; Purchase price and payment; Delivery of documents; Due diligence; Warranties; Indemnities; Breach; Restraint of Trade; Confidentiality; Dispute Resolution; Pre-emptive rights; Notices; General.

if the entity is a close corporation, you’ll need a Sale of Member’s Interest Agreement.

What does the contract look like? The template document can be printed onto fifteen pages.

What do you need to do to use the template Sale of Shares Agreement?

• Read the sample contract to ensure that it suits your requirements, and make changes as required. The Agreement can be used for one or more shareholders selling shares, in which event clause 1 (Parties), clause 17 (Signatures) and Annexure 1 (Sale details) can be adjusted accordingly.
• Complete the relevant details, such as the details of the Seller/s and Purchaser, the name of the Company and the purchase price and terms in Annexure 1. Ensure that any blanks in the document have been completed.
• Ensure all the parties sign the agreement and receive a copy.
• The new shareholder may need to consider a Shareholder’s Agreement.

Also viewed:

• Sale of Shares Agreement: in part to a non-shareholder
• Sale of Shares Agreement: in part to an existing shareholder
• Sale of Shares Agreement: in total to an existing shareholder

The Online Agreements Shop cc and its members, staff, legal advisers, partners and consultants, agents and any person associated therewith cannot be held liable for any loss or damage that is incurred or may be incurred by any person as a direct or indirect result of the use of this website or any document or information contained on or obtained from this website, nor as a result of anything that is contained in or left out of any document.