Question 1

What is a Sale of Shares Agreement?

Accepted Answer

A Sale of Shares Agreement is a legal contract documenting the transfer of ownership in a company from a seller to a buyer. Unlike a sale of business assets, it transfers the shares themselves, meaning the buyer acquires ownership in the company entity including all its assets, liabilities, contracts, and obligations.

Question 2

Is this template compliant with South African law?

Accepted Answer

Yes, this template is drafted in accordance with South African company law and the Companies Act. It includes provisions for proper share transfer procedures, Securities Transfer Tax considerations, and compliance with any existing shareholders agreement restrictions.

Question 3

Can I customize this template?

Accepted Answer

Yes, the template allows you to specify the number and class of shares, purchase price or valuation method, payment terms, conditions precedent, warranties, and indemnities specific to your transaction.

Question 4

What key clauses are included in the template?

Accepted Answer

The template covers: share details and purchase price; payment terms and conditions; representations and warranties from seller and buyer; indemnification provisions; conditions precedent; restraint of trade; dispute resolution; and transfer mechanics.

Question 5

Who should use this template?

Accepted Answer

This template is suitable for shareholders selling their stake in a company, whether to existing shareholders, new investors, or third parties. It's commonly used for partial or complete exits, buy-outs, and investment transactions.

Question 6

What format is the template delivered in?

Accepted Answer

The template is delivered in Microsoft Word format (.docx), allowing both buyer and seller to negotiate and customize terms before execution.

Template Sale of Shares
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Template Sale of SharesAgreement