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Share Sale Agreement

Share Sale Agreement Template for South Africa

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Key Requirements PROMPT example:

Share Sale Agreement

"I need a Share Sale Agreement for the sale of 60% shareholding in a private technology company to a foreign investor, with specific provisions for earnout payments based on 2025 performance targets and exchange control compliance."

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Document background
The Share Sale Agreement is a fundamental document used in South African corporate transactions for transferring ownership of shares between parties. It is essential for both private and public company transactions, though the complexity and regulatory requirements may vary. This agreement type is crucial when a shareholder wishes to sell their shareholding, during company acquisitions, or in corporate restructuring. The document must comply with South African corporate law, particularly the Companies Act 71 of 2008, and includes provisions for share transfer, purchase price determination, warranties about the company's status and operations, conditions precedent, and completion mechanisms. It may also need to address requirements under competition law, exchange control regulations, and sector-specific legislation. The agreement is typically more complex when the transaction involves a significant portion of shares or the entire company's shareholding.
Suggested Sections

1. Parties: Identification and details of the Seller and Purchaser

2. Background: Context of the transaction and brief description of the target company

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

4. Sale and Purchase: Core transaction terms including description of shares being sold

5. Purchase Price: Price, payment terms, and adjustment mechanisms

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

7. Completion: Process and requirements for closing the transaction

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

9. Purchaser's Warranties: Basic warranties from the purchaser regarding capacity and authority

10. Pre-completion Obligations: Obligations of parties between signing and completion

11. Confidentiality: Provisions regarding confidential information

12. Notices: Process and requirements for formal communications

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, etc.

Optional Sections

1. Tax Indemnity: Specific indemnities relating to tax matters - used when tax risks are identified

2. Post-completion Obligations: Specific obligations after completion - used when ongoing requirements exist

3. Non-competition: Restrictions on seller's future activities - used when protecting business value

4. Earn-out Provisions: Additional payment mechanisms based on future performance - used in performance-based deals

5. Security for Payment: Payment security mechanisms - used when payment is deferred or there are concerns

6. Break Fee: Compensation if deal fails - used in high-value or complex transactions

7. Management Arrangements: Terms for ongoing management - used when sellers remain involved

8. Exchange Control: Provisions for foreign transactions - used with international parties

Suggested Schedules

1. Details of the Company: Corporate information, share capital structure, and subsidiaries

2. Warranties: Detailed warranties about the company, business, and shares

3. Completion Requirements: Detailed list of documents and actions required at completion

4. Company Assets: List of material assets owned by the company

5. Material Contracts: Summary of key contracts affecting the business

6. Intellectual Property: Details of IP owned or licensed by the company

7. Employee Information: Key employment terms and agreements

8. Properties: Details of owned and leased properties

9. Disclosed Matters: Specific disclosures against the warranties

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
Business Day
Closing Date
Companies Act
Company
Competition Act
Completion
Conditions Precedent
Confidential Information
Consideration
Disclosed
Disclosure Schedule
Effective Date
Encumbrance
Financial Statements
Financial Year
Group
Income Tax Act
Intellectual Property
Long Stop Date
Material Adverse Change
Material Contracts
Ordinary Shares
Parties
Purchase Price
Purchaser
Sale Shares
SARS
Securities Transfer Tax
Seller
Signature Date
Subsidiary
Tax
Tax Authority
Transaction
Warranties
ZAR
Business
Claim
Completion Date
Competition Authorities
Damages
Due Diligence
Employees
Exchange Control Regulations
Indemnity
Interest
Losses
Management Accounts
Material
Properties
Records
Related Party
Representatives
Share Capital
Shareholders
Takeover Regulations
Working Capital
Clauses
Interpretation
Definitions
Sale and Purchase
Purchase Price
Payment Terms
Conditions Precedent
Completion
Pre-completion Obligations
Post-completion Obligations
Warranties
Representations
Tax Indemnities
Share Transfer
Company Administration
Confidentiality
Non-Competition
Non-Solicitation
Security for Payment
Breach
Dispute Resolution
Governing Law
Jurisdiction
Force Majeure
Assignment
Severability
Entire Agreement
Variation
Waiver
Costs
Notices
Good Faith
Further Assurance
Counterparts
Competition Compliance
Exchange Control
Due Diligence
Disclosure
Indemnification
Announcements
Third Party Rights
Time of Essence
Set-off
Survival of Provisions
Relevant Industries

Financial Services

Technology

Manufacturing

Retail

Mining

Agriculture

Healthcare

Real Estate

Energy

Telecommunications

Professional Services

Construction

Education

Transportation

Hospitality

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Tax

Compliance

Risk Management

Treasury

Corporate Secretariat

Business Development

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Legal Counsel

Company Secretary

Finance Director

Mergers & Acquisitions Director

Investment Banker

Corporate Finance Manager

Tax Director

Compliance Officer

Due Diligence Manager

Business Development Director

Strategy Director

Risk Manager

Industries
Companies Act 71 of 2008: Primary legislation governing companies in South Africa, including share transfers, shareholder rights, and corporate governance requirements
Securities Transfer Tax Act 25 of 2007: Regulates the taxation aspects of transferring securities, including shares, in South African companies
Income Tax Act 58 of 1962: Governs the tax implications of share sales, including capital gains tax considerations and securities transfer tax
Financial Intelligence Centre Act 38 of 2001: Establishes requirements for identity verification and anti-money laundering compliance in financial transactions
Competition Act 89 of 1998: Regulates merger control and may require notification and approval for larger share acquisitions
Stock Exchanges Control Act 1 of 1985: Relevant for listed companies and regulation of share transfers through licensed exchanges
Consumer Protection Act 68 of 2008: May apply to share sales involving individual shareholders or small businesses as purchasers
Exchange Control Regulations: Governs cross-border transactions and foreign ownership of South African shares
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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