Shares buy-sell agreement
Document overview
- AB
- BC
- MB
- ON
- SK
- Length:15 pages (3650 words)
- Available in:Microsoft Word DOCXApple PagesRTF
If the document isn’t right for your circumstances for any reason, just tell us and we’ll refund you in full immediately.
We avoid legal terminology unless necessary. Plain English makes our documents easy to understand, easy to edit and more likely to be accepted.
You don’t need legal knowledge to use our documents. We explain what to edit and how in the guidance notes included at the end of the document.
Email us with questions about editing your document. Use our Lawyer Assist service if you’d like our legal team to check your document will do as you intend.
Our documents comply with the latest relevant law. Our lawyers regularly review how new law affects each document in our library.
About this shares sale agreement
This document is for use by a buyer of shares in a private company in circumstances where the buyer does not require the full protection of detailed warranties.
Whether transfer of control of a company takes place by a transfer of all the shares, or less than all of them, the buyer knows far less than the sellers about the company. So most of the substance of the legal agreement consists in warranties. Of those warranties, those relating to real property - land and buildings - are likely to be most important.
However, sometimes buyers do not need to rely on detailed warranties. This document is drawn for such an occasion.
Examples when this document might be used include when:
- shares change hands within the existing body of shareholders and directors, such as on a management buy-in by a director, or on sale by one shareholder.
- you are buying from a close friend or relative whom you trust absolutely, and you may not think it appropriate to tie that person down to the extent of a massive slate of detailed warranties.
- the risk of overstatement or understatement of assets or liabilities is low.
- the company is being sold to another company in the same group in a reorganisation of group structure.
Warranties
A warranty is a promise that something is as it is described, and which, if untrue, can allow the side relying on that information to seek compensation.
Warranties are used primarily because they protect the buyer, who does not have the same information as the seller about the company as the seller. However, when the risks are lower: such as when buyer knows the company or trusts the seller, warranties are less useful.
In this agreement we provide warranties as to title, general background, accounts, cash flow, taxation, and assets. You can choose whether you want each to be given or not. Sellers will, obviously, want to limit the warranties given.
The law in this agreement
The framework of the deal is the Business Corporations Act. Within that framework, there are no special requirements as to what your deal should be.
Similar documents
This agreement is for the situation where the buyer purchases the shares of an existing shareholder.
If you require extensive warranties, our longer share sale and purchase agreement contains these.
Sometimes, you may want to change relative ownership proportions at the same time as the sale by subscribing to newly issued shares. For example, you may buy the shares of a departing shareholder and then invest additional equity to obtain a majority shareholding. In that case, you will need a Share purchase and subscription agreement.
Alternatively, you may be just want to invest alongside existing shareholders. In that situation, you need a Share subscription agreement. We also sell a simple shares subscription agreement for uncomplicated transactions that don’t require the warranties that the other documents have.
You may also need other documents:
Contents
- Definitions: simple ways to avoid legalese and cover multiple situations of the same type
- Interpretation
- Agreement for sale and subscription
- Calculation of minimum net profit
- Completion and delivery of documents
- Warranties applicability and limitation
- Warranties by sale shareholders
- Restrictive agreement
- Restrictive agreement
- Miscellaneous matters
- Schedule 1: Company information
- Schedule 2: Warranties
Recent reviews
Choose the level of support you need
Document Only
- This document
- Detailed guidance notes explaining how to edit each paragraph
Lawyer Assist
- This document
- Document with guidance notes explaining how to edit each paragraph
- Unlimited email support - ask our legal team any question related to completing the document
- Review of your edited document by our legal team including:
- reporting on whether your changes comply with the law
- answering your questions about how to word a new clause or achieve an outcome
- checking that your use of defined terms is correct and consistent
- correcting spelling mistakes
- reformatting the document ready to sign
All rights reserved