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Share Contribution Agreement

Share Contribution Agreement Template for South Africa

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Key Requirements PROMPT example:

Share Contribution Agreement

"I need a Share Contribution Agreement under South African law for a tech startup founder contributing 1,000 ordinary shares to a new holding company, with completion scheduled for March 2025 and including specific warranties about intellectual property rights."

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Document background
The Share Contribution Agreement is a specialized legal instrument used in South African corporate transactions where shares are being contributed from one party to another, often as part of a larger corporate restructuring, investment, or business combination transaction. This document is essential when shareholders wish to contribute their shares to another entity, whether for consideration or as a capital contribution. The agreement must comply with South African company law requirements, including the Companies Act 71 of 2008, Securities Transfer Tax Act, and where applicable, Exchange Control Regulations. It typically includes detailed provisions about the shares being contributed, warranties about their status and ownership, completion mechanics, and tax implications. The Share Contribution Agreement is particularly important in scenarios involving corporate reorganizations, formation of holding companies, or implementation of Black Economic Empowerment (BEE) structures in South Africa.
Suggested Sections

1. Parties: Identification of the Contributor(s) and the Recipient Company/Entity

2. Background: Context of the share contribution, including details about the company whose shares are being contributed and the purpose of the contribution

3. Definitions and Interpretation: Key terms used in the agreement and rules for interpretation

4. The Contribution: Details of the shares being contributed, including number, class, and nominal value

5. Completion: Mechanics and timing of the share contribution, including delivery of share certificates and signing of transfer forms

6. Contributor Warranties: Warranties regarding ownership, authority to transfer, and status of the shares

7. Company Warranties: Warranties about the company whose shares are being contributed

8. Tax Provisions: Handling of tax implications and responsibilities

9. Confidentiality: Obligations regarding confidential information

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

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

Optional Sections

1. Consideration: Required if there is any consideration being paid for the share contribution

2. Conditions Precedent: Include if completion is subject to certain conditions being met

3. Security Arrangements: Required if any security is being provided in relation to the contribution

4. Post-Completion Obligations: Include if there are specific obligations that must be fulfilled after the contribution

5. Exchange Control: Required if any party is non-resident or if there are cross-border elements

6. Tag-Along/Drag-Along Rights: Include if there are multiple shareholders and specific exit rights are needed

7. Non-Competition: Include if the contributor needs to be restricted from competing activities

8. Regulatory Compliance: Required if specific regulatory approvals or compliance measures are needed

Suggested Schedules

1. Details of the Shares: Detailed description of the shares being contributed, including share certificates numbers and shareholding history

2. Company Information: Key details about the company including registration number, registered office, directors, and share capital structure

3. Completion Requirements: Checklist of documents and actions required for completion

4. Warranties: Detailed warranties about the shares and the company

5. Board Resolutions: Pro forma board resolutions required to effect the contribution

6. Share Transfer Forms: Pro forma share transfer documentation

7. Tax Declarations: Required tax forms and declarations

8. Regulatory Filings: List of required regulatory filings and their status

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
Affiliate
Agreement
Board
Business Day
Companies Act
Company
Completion
Completion Date
Conditions Precedent
Confidential Information
Consideration
Contributed Shares
Contributor
CIPC
Effective Date
Encumbrance
Financial Year
Group
JSE
Material Adverse Change
MOI
Parties
Recipient
Related Party
SARS
Securities Transfer Tax
Share Certificate
Shareholders
Signature Date
South African Reserve Bank
Share Register
Share Transfer Form
Takeover Regulations
Tax
Transaction
Transfer Secretary
Warranties
ZAR
Relevant Industries

Financial Services

Professional Services

Technology

Manufacturing

Mining

Real Estate

Healthcare

Retail

Energy

Telecommunications

Agriculture

Construction

Transportation

Education

Hospitality

Relevant Teams

Legal

Corporate Finance

Tax

Compliance

Company Secretarial

Executive Management

Treasury

Corporate Development

Mergers & Acquisitions

Risk Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Legal Counsel

Company Secretary

Financial Director

Corporate Finance Manager

Tax Manager

Compliance Officer

Investment Manager

Corporate Development Director

Mergers & Acquisitions Director

Board Member

Managing Director

Transaction Advisory Manager

Industries
Companies Act 71 of 2008: Primary legislation governing company formation, share capital, share transfers, and corporate actions in South Africa. Crucial for ensuring compliance with statutory requirements for share transfers and contributions.
Financial Markets Act 19 of 2012: Regulates financial markets and securities trading in South Africa. Relevant for share transfers, especially if the shares are listed or if the transaction involves regulated financial products.
Income Tax Act 58 of 1962: Governs the tax implications of share transfers and contributions, including capital gains tax considerations and securities transfer tax obligations.
Financial Advisory and Intermediary Services Act 37 of 2002: Relevant if the share contribution involves financial services providers or financial advice, ensuring compliance with financial sector regulations.
Exchange Control Regulations (Currency and Exchanges Act 9 of 1933): Crucial for share contributions involving non-resident parties or cross-border elements, ensuring compliance with South Africa's foreign exchange control requirements.
Securities Transfer Tax Act 25 of 2007: Governs the tax payable on transfers of securities, including shares, which is relevant for share contribution transactions.
Protection of Personal Information Act 4 of 2013: Ensures compliance with data protection requirements when handling personal information of parties involved in the share contribution agreement.
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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