Stock Transfer Agreement Template for India

A Stock Transfer Agreement is essential when transferring ownership of shares in Indian companies, whether private or public. This document is commonly used in various scenarios including corporate restructuring, investment exits, succession planning, or strategic acquisitions. The agreement must comply with Indian corporate law, particularly the Companies Act 2013, and may require additional regulatory compliance depending on the nature of the transfer (e.g., SEBI regulations for listed companies, FEMA for foreign investors). It typically includes detailed information about the shares being transferred, consideration amount, payment terms, representations and warranties, and completion mechanics. The document serves as crucial evidence of the transfer and helps prevent future disputes by clearly documenting the terms and conditions of the transaction.

1. Parties: Identification of the transferor and transferee, including their full legal names, addresses, and registration details if companies

2. Background: Context of the transfer, including details about the company whose shares are being transferred and the reason for the transfer

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules for interpreting the agreement

4. Agreement to Transfer: Core provision detailing the agreement to transfer the shares from transferor to transferee

5. Consideration: Details of the purchase price and payment terms for the shares

6. Conditions Precedent: Conditions that must be satisfied before the transfer can complete

7. Completion: Mechanics and timing of the transfer completion, including actions to be taken by each party

8. Representations and Warranties: Statements of fact and assurances given by the transferor regarding the shares and their authority to transfer

9. Transferor's Covenants: Ongoing obligations of the transferor, including assistance with transfer formalities

10. Tax Provisions: Allocation of responsibility for taxes arising from the transfer

11. Confidentiality: Obligations to keep the transaction and its terms confidential

12. Notices: Process for giving formal notices under the agreement

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

14. Execution: Signature blocks and execution formalities