Share Agreement Template South Africa: An Overview

A share agreement is a legal document that establishes the terms and conditions for the sale of shares in a company. It is a vital tool that protects the interests of the buyer and seller, ensuring that all parties can understand and agree on the terms of the sale. In South Africa, share agreements are governed by the Companies Act 71 of 2008.

If you are looking to buy or sell shares in a South African company, it is essential to have a well-drafted share agreement in place. Here, we will take a closer look at share agreements in South Africa and provide you with a share agreement template that you can use as a starting point.

What Should be Included in a Share Agreement?

A share agreement should include the following key elements:

1. Parties: A share agreement should identify the buyer and seller of the shares and their respective roles.

2. Shares: The agreement should specify the number and type of shares being sold, along with any attached rights or restrictions.

3. Purchase Price: The agreement should state the purchase price and payment terms for the shares.

4. Warranties: The buyer will typically require the seller to provide certain warranties, such as that the shares being sold are free of any charges, claims, or encumbrances.

5. Conditions: The agreement should specify any conditions that must be met before the transaction can be completed, such as regulatory approvals or the satisfaction of due diligence.

6. Representations: The agreement should contain representations by each party regarding their ability to enter into the transaction and their ownership of the shares.

7. Governing Law: The agreement should specify the governing law and jurisdiction of any disputes arising from the transaction.

8. Signatures: The agreement should be signed by both the buyer and seller, along with any necessary witnesses.

Share Agreement Template

To help you get started, we have provided a share agreement template that you can use as a starting point.

[Company Name]

SHARE AGREEMENT

BETWEEN:

[SELLER NAME], a [INSERT RELEVANT LEGAL ENTITY], with its registered office at [INSERT ADDRESS] (“Seller”)

AND

[BUYER NAME], a [INSERT RELEVANT LEGAL ENTITY], with its registered office at [INSERT ADDRESS] (“Buyer”)

RECITALS:

A. The Seller is the owner of [NUMBER] [TYPE] shares (the “Shares”) in [COMPANY NAME] (the “Company”).

B. The Buyer wishes to purchase the Shares from the Seller, and the Seller wishes to sell the Shares to the Buyer, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, the parties agree as follows:

1. Sale of Shares

The Seller agrees to sell and the Buyer agrees to purchase [NUMBER] [TYPE] Shares in the Company for the purchase price of [INSERT PURCHASE PRICE] (the “Purchase Price”).

2. Payment

The Purchase Price will be paid by the Buyer to the Seller as follows:

(a) [INSERT PAYMENT TERMS].

3. Warranties

The Seller warrants and represents that:

(a) It is the legal and beneficial owner of the Shares;

(b) The Shares are free and clear of all encumbrances, liens, charges, or claims;

(c) There are no agreements or arrangements in place that would restrict or prevent the sale of the Shares;

(d) The execution and delivery of this Agreement does not violate any agreement or obligation to which the Seller is a party;

(e) The Shares are lawful and validly issued; and

(f) The Company is in good standing under the laws of South Africa.

4. Conditions

Completion of this transaction is subject to the satisfaction of the following conditions:

(a) [INSERT CONDITIONS].

5. Governing Law

This Agreement will be governed by and construed in accordance with the laws of South Africa. Any dispute arising out of this Agreement shall be settled by arbitration in accordance with the rules of the Arbitration Foundation of South Africa.

6. Entire Agreement

This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, and understandings, whether written or oral.

7. Signatures

This Agreement may be executed in counterparts and may be executed and delivered by electronic means. The parties have executed this Agreement on the date first above written.

Signed:

SELLER:

Name: [INSERT NAME]

Title: [INSERT TITLE]

Date: [INSERT DATE]

BUYER:

Name: [INSERT NAME]

Title: [INSERT TITLE]

Date: [INSERT DATE]

Conclusion

A share agreement is a vital document for buying or selling shares in a South African company. It protects both the buyer and seller by clearly outlining the terms and conditions of the sale. With our sample share agreement template, you can ensure that you have a solid foundation for a successful transaction. However, it is always advisable to consult with a lawyer to ensure that your agreement complies with the relevant legal requirements.