Shareholder Buy Sell Agreement Template for England and Wales

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Key Requirements PROMPT example:

Shareholder Buy Sell Agreement

"Need a Shareholder Buy Sell Agreement for our technology startup with five founding shareholders, including provisions for life insurance funding and specific valuation methods for intellectual property assets."

Document background
A Shareholder Buy Sell Agreement is essential for companies seeking to maintain control over ownership transitions and protect shareholder interests under English and Welsh law. It becomes particularly important when shareholders wish to restrict share transfers, establish clear exit mechanisms, or plan for unexpected events. The agreement typically includes valuation methods, payment terms, and funding mechanisms for share purchases, while ensuring compliance with UK company law and regulatory requirements. It serves as a crucial tool for business continuity and dispute prevention.
Suggested Sections

1. Parties: Identification of all shareholders and the company

2. Background: Context of the agreement and current shareholding structure

3. Definitions: Key terms used throughout the agreement

4. Transfer Restrictions: General restrictions on share transfers

5. Triggering Events: Events that trigger buy-sell provisions (death, disability, retirement, etc.)

6. Valuation Mechanism: Method for determining share price upon triggering events

7. Payment Terms: Terms and conditions for purchase payments

8. Governing Law: Specification of English and Welsh law governance

Optional Sections

1. Insurance Provisions: Details of life insurance policies funding share purchases

2. Tag-Along Rights: Rights of minority shareholders to join in sale

3. Drag-Along Rights: Rights to force minority shareholders to join sale

4. Right of First Refusal: Rights of existing shareholders to purchase before third parties

Suggested Schedules

1. Current Shareholding Schedule: Details of current share ownership

2. Valuation Formula: Detailed methodology for share valuation

3. Insurance Policies: Details of relevant insurance policies

4. Form of Transfer Notice: Standard form for initiating share transfers

5. Deed of Adherence: Template for new shareholders joining agreement

Authors

Alex Denne

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

Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company operations, including share transfers, share capital, directors' duties and powers, pre-emption rights, and articles of association requirements

Financial Services and Markets Act 2000: Regulates share transfers and financial promotion rules in the context of company shareholding

Insolvency Act 1986: Contains provisions relating to company insolvency and its impact on shareholdings and share transfers

Law of Property (Miscellaneous Provisions) Act 1989: Establishes key contract law principles relevant to share purchase agreements and formal requirements

Corporation Tax Act 2010: Tax legislation affecting corporate transactions and share transfers, including tax implications for the company

Income Tax Act 2007: Covers personal tax implications for shareholders in relation to share transfers and dividends

Employment Rights Act 1996: Relevant when buy-sell provisions are linked to employment status or termination of employment

Matrimonial Causes Act 1973: Governs implications of divorce on shareholdings and potential transfer requirements

Inheritance and Trustees' Powers Act 2014: Relevant for succession planning and transfer of shares upon death of shareholders

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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