Stock Redemption Agreement Template for Singapore

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Key Requirements PROMPT example:

Stock Redemption Agreement

"Need a Stock Redemption Agreement for our Singapore-based technology company to buy back 25,000 shares from a retiring founder by March 2025, with payment to be made in three installments over 18 months."

Document background
A Stock Redemption Agreement is commonly used when a Singapore company wishes to buy back its shares from existing shareholders, often in situations such as shareholder exits, succession planning, or corporate restructuring. The document must comply with Singapore's strict corporate law requirements, particularly regarding capital maintenance and solvency. It typically includes detailed provisions on valuation, payment terms, conditions precedent, and completion mechanics, while ensuring compliance with the Companies Act and relevant regulatory frameworks. The agreement is crucial for protecting both the company's and shareholders' interests during the share redemption process.
Suggested Sections

1. Parties: Identification of the company and selling shareholders

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

3. Definitions: Key terms used throughout the agreement

4. Redemption Terms: Number of shares, price, and payment terms

5. Conditions Precedent: Requirements to be met before redemption

6. Completion Mechanics: Process and timing of the redemption

7. Representations and Warranties: Standard assurances from both parties

8. Governing Law and Jurisdiction: Application of Singapore law and dispute resolution

Optional Sections

1. Tag-Along Rights: Used when other shareholders have rights to participate in the redemption

2. Earn-out Provisions: When redemption price includes future performance elements

3. Non-Competition: Required when selling shareholders need to be restricted post-redemption

4. Tax Indemnities: When specific tax arrangements need to be addressed

Suggested Schedules

1. Share Details: Details of shares being redeemed including share certificates

2. Completion Requirements: Checklist of documents and actions required at completion

3. Board Resolutions: Required corporate approvals

4. Calculation of Redemption Price: Formula or method for determining share value

5. Solvency Statement: Directors' statement confirming company solvency post-redemption

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 legal definitions
Industries

Companies Act (Chapter 50): Primary legislation governing corporate matters including share capital, redemptions, capital maintenance rules, directors' duties, financial assistance restrictions, and solvency requirements for Singapore companies

Securities and Futures Act (Chapter 289): Regulatory framework for securities transactions, including disclosure obligations, trading restrictions, and investor protection provisions

Income Tax Act: Tax legislation covering the tax implications of share redemptions, stamp duty considerations, and capital gains tax treatment

MAS Regulations: Financial regulations issued by the Monetary Authority of Singapore covering compliance guidelines, securities trading regulations, and corporate governance requirements

Competition Act: Legislation governing competition law issues, including merger control provisions that may be relevant to share redemptions

Singapore Contract Law: Common law principles governing contract formation, consideration requirements, terms and conditions, and remedies for breach

Corporate Constitution: Company's constitutional documents including articles of association that may contain specific provisions regarding share redemptions

Shareholders' Agreements: Existing agreements between shareholders that may contain provisions affecting share redemptions

Stock Exchange Requirements: Specific requirements for listed companies if the company is publicly traded on the Singapore Exchange (SGX)

Corporate Governance Code: Guidelines and principles for corporate governance that may affect the process and disclosure of share redemptions

Foreign Ownership Regulations: Restrictions and requirements regarding foreign ownership of shares in Singapore companies, if applicable

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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