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  Wales

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Summary

Contents

This Agreement for Selling & Buying Shares in a Limited Company is a business contract to be used by shareholders who are selling and buying shares in a limited company.

The contract template is used when both the seller and the buyer are the only shareholders in a limited company, so the business sale will transfer control of the limited company to the buyer.

This contract template, in a “Download Now” Word format, is shorter than similar share sale agreements because of the relationship between the two parties, as they are both shareholders and are on the board of the limited company.

Due to this, the warranties in the contract are limited and this template contract mainly deals with the number of shares being sold, the price of the sale shares and what happens when the shares have been sold; in, other words, the payment and resignation of the selling shareholder as a director.

For further details of the terms included in Agreement for Selling & Buying Shares in a Limited Company, see the ‘Contents tab above.

Drafted by solicitors for straightforward completion, the “Download Now” Agreement for Selling & Buying Shares in a Limited Company includes guidance on how to fill in the contract template.

Agreement for Selling & Buying Shares in a Limited Company Note:

Agreement for Selling & Buying Shares in a Limited Company is supplied by ContractStore.com.

 

For obvious reasons we can't show you the actual contract template before you purchase it, but outlined below are the explanatory notes that go with it. These explain the thinking behind it, and should give you a good idea of the terms of the business contract.

 

Explanatory Notes

Agreement for Selling & Buying Shares in a Limited Company

This Agreement for Selling & Buying Shares in a Limited Company is designed for use where the two parties are the only shareholders in a company and one of them wishes to sell his/its holding to the other. In such circumstances where, as our Agreement for Selling & Buying Shares in a Limited Company contemplates, both parties are represented on the board of the company and both of them are parties to a Shareholders Agreement , very little formality is required: both of them should already know about the company's business without the buyer having to rely on 'due diligence'.

The main concern from the Buyer's point of view is to ensure that the shares which he is acquiring are beneficially owned by the Seller and that no third party has any undisclosed interest in those shares. The Buyer will also want to be sure that the sale is only completed when the Seller's directors resign (or the Seller resigns as director) from the board.

Turning to the specific clauses:

1. SALE & PURCHASE OF SHARES

This sets out the transaction and refers to a schedule which specifies the number of shares being transferred.

2. PRICE

This contains the price payable by Buyer to Seller and makes it clear that payment will be due on completion.

3. WARRANTIES

This deals with the point made above: the Seller warrants to the Buyer that he is the beneficial owner of the shares and that the same situation will apply at completion. In the interim period, Clause 3.3 makes it clear that the Seller will not do anything to prejudice the business of the Company. Clause 3.4 provides for an optional indemnity to be given to Buyer by Seller in the event that Seller is in breach of the warranties in clause 3.

4. COMPLETION

This deals with the mechanics of the transaction - when the shares will be transferred and resignation letters from Seller's nominated directors (or, where Seller is a director, his resignation) will be handed over. Payment will also be made for the shares at this point (4.2). Clause 4.3 provides for payment of interest in the event that all or part of the purchase price is paid late.

5. GENERAL PROVISIONS

This clause sets out a number of standard "boiler plate" provisions.

6. GOVERNING LAW AND JURISDICTION

The governing law of the agreement is English law and the English courts are to have exclusive jurisdiction in relation to any disputes arising from the Agreement for Selling & Buying Shares in a Limited Company.

7. SHAREHOLDERS AGREEMENT

If the Buyer and Seller are the two parties to a Shareholders Agreement , this clause will be applicable and the effect will be for the Shareholders Agreement to be terminated on completion.