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Company Share Sale Agreement

Company Share Sale Agreement Template for South Africa

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Key Requirements PROMPT example:

Company Share Sale Agreement

"I need a Company Share Sale Agreement for the sale of 60% shareholding in a South African technology company to a foreign investor, with completion scheduled for March 2025, including specific provisions for Reserve Bank approval and B-BBEE compliance maintenance."

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Document background
The Company Share Sale Agreement is a crucial document used in South African corporate transactions when transferring ownership of company shares between parties. It's essential for both private and public company transactions, though the complexity and regulatory requirements may vary. This agreement must comply with South African legislation, including the Companies Act 71 of 2008, tax laws, and where applicable, exchange control regulations and B-BBEE requirements. The document typically includes detailed provisions on the sale terms, warranties, indemnities, and conditions precedent, while also addressing specific South African regulatory considerations. It's particularly important in M&A transactions, corporate restructurings, and investment deals, requiring careful consideration of corporate governance, tax implications, and regulatory compliance.
Suggested Sections

1. Parties: Identification and details of the seller(s) and purchaser(s), including registration numbers for companies

2. Background: Context of the transaction, including company details and reason for the share sale

3. Definitions and Interpretation: Defined terms and interpretation rules for the agreement

4. Sale of Shares: Core transaction terms including number of shares, class of shares, and sale price

5. Purchase Price: Detail on consideration, payment terms, and payment mechanics

6. Conditions Precedent: Requirements that must be fulfilled before the agreement becomes effective

7. Completion: Process and requirements for closing the transaction

8. Seller's Warranties: Representations and warranties regarding the shares and the company

9. Purchaser's Warranties: Representations and warranties from the purchaser, including capacity to purchase

10. Tax Matters: Allocation of tax liabilities and obligations

11. Confidentiality: Obligations regarding confidential information

12. Announcements: Requirements for public statements about the transaction

13. Notices: Process and requirements for formal communications between parties

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

15. Signature: Execution blocks for all parties

Optional Sections

1. Seller Financing: Terms of any vendor financing arrangement if the purchase price is not paid in full at completion

2. Security Arrangements: Details of any security provided for deferred payments or other obligations

3. Management During Interim Period: Governance between signing and completion if there's a gap

4. Non-Compete Provisions: Restrictions on seller's future business activities

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

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

7. B-BBEE Provisions: Specific provisions relating to maintaining or achieving B-BBEE status

8. Exchange Control: Special provisions for foreign purchasers requiring Reserve Bank approval

9. Break Fee: Compensation payable if either party terminates the transaction

10. Post-Completion Adjustments: Mechanism for adjusting purchase price based on completion accounts

Suggested Schedules

1. Share Details: Detailed description of shares being sold including share certificates numbers

2. Company Information: Key company details including assets, liabilities, and material contracts

3. Warranties: Detailed warranties about the company and its business

4. Disclosure Schedule: Seller's disclosures against the warranties

5. Completion Requirements: Detailed list of documents and actions required for completion

6. Company Financial Statements: Recent financial statements of the company

7. Material Contracts: List and copies of important company contracts

8. Intellectual Property: Schedule of company's IP rights

9. Properties: Details of company's real estate holdings

10. Employee Information: Details of key employees and employment terms

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
B-BBEE
B-BBEE Act
Board
Business
Business Day
Closing Date
Companies Act
Company
Competition Act
Competition Authorities
Conditions Precedent
Confidential Information
Consideration
Delivery
Disclosure Schedule
Effective Date
Encumbrance
Exchange Control Regulations
Financial Statements
Financial Year
Group
Income Tax Act
Intellectual Property Rights
Material Adverse Change
Material Contracts
Ordinary Shares
Parties
Purchase Price
Purchaser
Related Persons
Relevant Authority
Sale Shares
SARB
Securities Transfer Tax
Seller
Signature Date
South African Reserve Bank
Subsidiary
Tax
Transaction
Transfer Secretary
VAT
VAT Act
Warranties
Clauses
Interpretation
Definitions
Sale and Purchase
Purchase Price
Payment Terms
Conditions Precedent
Completion
Pre-Completion Obligations
Completion Obligations
Post-Completion Obligations
Warranties
Indemnities
Tax Matters
B-BBEE Compliance
Exchange Control
Competition Law
Due Diligence
Confidentiality
Non-Competition
Non-Solicitation
Intellectual Property
Data Protection
Force Majeure
Assignment
Breach
Dispute Resolution
Governing Law
Jurisdiction
Notices
Costs
General Provisions
Severability
Whole Agreement
Variation
Waiver
Signature
Relevant Industries

Financial Services

Manufacturing

Mining

Technology

Retail

Healthcare

Real Estate

Agriculture

Transportation

Energy

Telecommunications

Professional Services

Construction

Entertainment

Education

Hospitality

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Tax

Compliance

Risk Management

Corporate Secretariat

Treasury

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Attorney

Investment Banker

Financial Director

Company Secretary

Mergers & Acquisitions Director

Tax Director

Corporate Finance Manager

Compliance Officer

Due Diligence Officer

Transaction Advisory Manager

Business Development Director

Investment Manager

Risk Manager

Industries
Companies Act 71 of 2008: Primary legislation governing company operations, share transfers, and corporate transactions in South Africa. Contains requirements for share transfers, company ownership structures, and necessary corporate approvals.
Income Tax Act 58 of 1962: Regulates tax implications of share sales, including capital gains tax considerations, securities transfer tax, and other tax obligations arising from the transaction.
Securities Transfer Tax Act 25 of 2007: Governs the tax payable on transfers of securities, including company shares, currently at a rate of 0.25% of the transfer value.
Competition Act 89 of 1998: Relevant for larger transactions that might require competition authority approval, particularly if the transaction meets merger notification thresholds.
Exchange Control Regulations (Currency and Exchanges Act 9 of 1933): Governs cross-border transactions and foreign ownership of South African shares, requiring Reserve Bank approval in certain circumstances.
Broad-Based Black Economic Empowerment Act 53 of 2003: Important for considering the impact of the share sale on the company's B-BBEE status and compliance requirements.
Financial Intelligence Centre Act 38 of 2001: Requires due diligence and know-your-customer (KYC) procedures to prevent money laundering in financial transactions.
Consumer Protection Act 68 of 2008: May be relevant if shares are being sold to individual consumers rather than corporate entities.
Financial Advisory and Intermediary Services Act 37 of 2002: Relevant if financial advisors or intermediaries are involved in facilitating the share sale.
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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