Free Share Purchase Agreement

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Share Purchase Agreement

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SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT (the "Agreement") made and entered into this ________ day of ____________, _________ (the "Execution Date"),

BETWEEN:

____________________ of ______________________________
(the "Seller")

OF THE FIRST PART

and

____________________ of ______________________________
(the "Purchaser")

OF THE SECOND PART

BACKGROUND:

  1. The Seller is the owner of record of 1 ____________________ share (the "Share") of  ____________________  (the "Corporation").
  2. The Seller desires to sell the Shares to the Purchaser and the Purchaser desires to purchase the Shares from the Seller.

IN CONSIDERATION OF and as a condition of the parties entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows:

  1. Purchase and Sale
  2. Except as otherwise provided in this Agreement, all monetary amounts referred to in this Agreement are in AUD (Australian Dollars).
  3. The Seller agrees to sell and the Purchaser agrees to purchase all the rights, title, interest, and property of the Seller in the Shares for an aggregate purchase price of $___________ (the "Purchase Price").
  4. A fixed sum of $___________ will be payable on closing of this Agreement.
  5. All payments will be in the form of certified cheque, wire transfer, or bank draft of immediately available funds. In the case of a direct wire transfer the Seller will give notice to the Purchaser of the bank account particulars at least 5 business days prior to the Closing Date.
  6. Representations and Warranties of the Seller
  7. The Seller warrants and represents to the Purchaser as follows:
    1. The Seller would not be recognised as an issuer, insider, affiliate, or associate of the Corporation as defined or recognised under applicable securities laws and regulations.
    2. Except as provided in the incorporating documents of the Corporation or as indicated on the face of the certificates for the Shares, the Purchaser would not be prevented or restricted in any way from re-selling the Shares in the future.
    3. The Seller is the owner in clear title of the Shares and the Shares are free of any lien, encumbrance, security interests, charges, mortgages, pledges, or adverse claim or other restriction that would prevent the transfer of clear title to the Purchaser.
    4. The Seller is not bound by any agreement that would prevent any transactions connected with this Agreement.
    5. There is no legal action or suit pending against any party, to the knowledge of the Seller, that would materially affect this Agreement.
  8. Representations and Warranties of the Purchaser
  9. The Purchaser warrants and represents to the Seller as follows:
    1. The Purchaser would not be recognised as an issuer, insider, affiliate, or associate of the Corporation as defined or recognised under applicable securities laws and regulations.
    2. The Purchaser is not bound by any agreement that would prevent any transactions connected with this Agreement.
    3. There is no legal action or suit pending against any party, to the knowledge of the Purchaser, that would materially affect this Agreement.
  10. Closing
  11. The closing of the purchase and sale of the Shares (the "Closing") will take place on ____ ________________ ________ (the "Closing Date") at the offices of the Seller or at such other time and place as the Seller and the Purchaser mutually agree. At Closing and upon the Purchaser paying the Purchase Price in full to the Seller, the Seller will deliver to the Purchaser duly executed transfers of the Shares.
  12. Expenses
  13. All parties agree to pay all their own costs and expenses in connection with this Agreement.
  14. Finder's Fees
  15. No party to this Agreement will pay any type of finder's fee to any other party to this Agreement or to any other individual in connection to this Agreement.
  16. All parties to this Agreement warrant and represent that no investment banker or broker or other intermediary has facilitated the transaction contemplated by this Agreement and is entitled to a fee or commission in connection with said transaction. All parties to this Agreement indemnify and hold harmless all other parties to this Agreement in connection with any claims for brokerage fees or other commissions that may be made by any party pertaining to this Agreement.
  17. Dividends
  18. Any dividends earned by the Shares and payable before the Closing of this Agreement will belong to the Seller, and any dividends earned by the Shares and payable after the Closing of this Agreement will belong to the Purchaser.
  19. Any rights to vote attached to the Shares will belong to the Seller before the Closing and will belong to the Purchaser after the Closing.
  20. Governing Law
  21. The Purchaser and the Seller submit to the jurisdiction of the courts of the Australian Capital Territory for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement. This Agreement will be enforced or construed according to the laws of the Australian Capital Territory.
  22. Miscellaneous
  23. Time is of the essence in this Agreement.
  24. This Agreement may be executed in counterparts.  Facsimile signatures are binding and are considered to be original signatures.
  25. All warranties and representations of the Seller and the Purchaser connected with this Agreement will survive the Closing.
  26. This Agreement will not be assigned either in whole or in part by any party to this Agreement without the written consent of the other party.
  27. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa.
  28. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
  29. This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties.
  30. This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Seller and the Purchaser and their respective successors, assigns, executors, administrators, beneficiaries, and representatives.
  31. Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
  32. All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law.

IN WITNESS WHEREOF the Seller and Purchaser have duly affixed their signatures under hand and seal on this ________ day of ____________, _________.

SIGNED, SEALED, AND DELIVERED

   

in the presence of:

 

____________________ (Seller)

     

Witness: ______________________ (Sign)

 

Per:_________________________ (SEAL)

Witness Name: ______________________

   


SIGNED, SEALED, AND DELIVERED

   

in the presence of:

 

____________________ (Purchaser)

     

Witness: ______________________ (Sign)

 

Per:_________________________ (SEAL)

Witness Name: ______________________

   

Last Updated February 29, 2024

Written by 

Reviewed by 


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Fact checked by 



What is a Share Purchase Agreement?

A Share Purchase Agreement is a document that transfers company shares (also called stocks) from one party to another. It contains the shares for sale, price, date of the transaction, and other terms and conditions.

A share is a unit of ownership in a company, and a shareholder is a person who owns shares. The more shares a shareholder owns, the higher the percentage of the company they own.

For example, if a company issues 100 shares and a shareholder owns 10 shares, the shareholder owns 10% of the company. Typically, this entitles the shareholder to 10% of the company's profits and 10% of the votes in a Corporate Resolution.

A Share Purchase Agreement is sometimes called a:

  • Stock purchase agreement
  • Share sale agreement
  • Share transfer agreement
  • Stock transfer agreement

Who needs a Share Purchase Agreement?

A Share Purchase Agreement allows an individual or corporation to sell or buy shares in a company.

For example, if you and two business partners all have equal shares in a company and one partner wishes to withdraw, they can use a Share Purchase Agreement to buy the withdrawing partner's shares. However, the purchaser can also be a person or business entity who will own shares in the company for the first time.

If the seller is transferring 100% of the company shares, they should use a Purchase of Business Agreement instead.

Is a Share Purchase Agreement legally binding?

Yes. A Share Purchase Agreement becomes a legal document once the purchaser and seller have signed it. Share transfers are only complete once both parties have signed the agreement.

Share transferring in Australia must follow the regulations set by the Corporations Act 2001.

What are warranties in a Share Purchase Agreement?

A warranty in a Share Purchase Agreement is a statement of assurance from the seller to the purchaser. Warranties can disclose risk and liabilities to the purchaser, helping them make a purchasing decision.

For example, a seller can assure a purchaser that they are the sole owner of the shares and have the authority to sell them. The seller would breach the agreement if they weren't the sole owner of the shares and didn't have the power to sell them without consent from the other owners.

Who drafts the Share Purchase Agreement?

The purchaser and seller are both able to draft a Share Purchase Agreement. However, it’s a good idea for both parties to have a lawyer review the document before completing the transaction, regardless of who drafts it.

How do I create a Share Purchase Agreement in Australia?

You can create a Share Purchase Agreement by completing LawDepot’s questionnaire. Using our template will help ensure you complete the following necessary steps.

1. State the seller’s and purchaser’s information

Provide the names and addresses of the shares’ seller and purchaser in your Share Purchase Agreement.

2. Outline the shares’ details

Outline important information about the company and the shares for sale. These details should include:

  • Company name
  • Company location
  • Number of shares for sale
  • Class/series of the shares

Sometimes a company will have multiple classes (also known as series) of shares. Each class provides shareholders with a different set of voting rights in a company’s decision-making process.

A Share Purchase Agreement must include the company’s location because Australia’s states and territories have unique laws and regulations. LawDepot’s template will tailor your document to meet these requirements.

3. State the payment details

State the price of the shares, the agreement’s closing date, and whether or not the seller requires a deposit.

The closing date is when the purchaser pays the outstanding balance and gains possession of the purchased shares.

A deposit is a portion of the total cost that the purchaser uses as collateral until the transaction is complete. If the agreement requires a deposit, include the date the purchaser must provide it to the seller.

4. Outline any additional clauses

Additional clauses are any terms and conditions you would like to include that aren’t already covered in your Share Purchase Agreement (e.g. warranties).

5. Provide the signing details

State when the seller and purchaser will sign the agreement and if there will be witnesses present.

A witness should be a neutral third party with no financial or other interest in the agreement. They don’t need to know or understand the contents of the agreement. Ideally, a witness will also sign the document immediately after observing the seller and purchaser sign it.

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