Simple Share Sale Agreement Template for Nigeria

A Simple Share Sale Agreement is a legal document that facilitates the straightforward transfer of company shares in Nigeria. This agreement serves as the foundational contract between a seller and buyer, establishing the terms and conditions under which shares in a Nigerian private company will be sold and purchased. Unlike complex share purchase agreements with extensive warranties and conditions precedent, this document is designed for transactions where parties seek a streamlined approach to share transfers.

When do you need this document?

You need a Simple Share Sale Agreement when you are selling or buying shares in a Nigerian private company and prefer a straightforward transaction structure. This document is ideal for family business transfers, transactions between known parties, or situations where extensive due diligence has already been completed. It's commonly used for minority shareholding transfers, employee share transfers, or when existing shareholders are selling to new investors. The agreement is particularly suitable when the parties have an established relationship and require basic legal protections without the complexity of comprehensive warranties and indemnities found in larger commercial transactions.

Key legal considerations

Several critical legal elements must be addressed in your share sale agreement. The purchase price and payment terms require careful specification, including whether payment will be made in installments or as a lump sum. Share certificates must be properly endorsed and transferred according to the company's articles of association. You must ensure all necessary board and shareholder approvals are obtained before completion. The agreement should address any restrictions on share transfers contained in the company's constitution. Tax implications, including capital gains tax obligations, must be considered and allocated between parties. Additionally, you should include basic warranties regarding the seller's ownership of shares and their right to transfer them.

Legal requirements in Nigeria

Under the Companies and Allied Matters Act (CAMA) 2020, share transfers must comply with specific statutory requirements. The company's board of directors must approve the transfer unless the articles of association provide otherwise. Share certificates must be surrendered and new certificates issued to reflect the change in ownership. The transfer must be registered in the company's register of members within 60 days of the transfer instrument being lodged. Stamp duty is payable on the transfer instrument under the Stamp Duties Act, calculated based on the transaction value. For transactions involving securities trading, compliance with the Investment and Securities Act 2007 may be required. If the transaction results in a change of control or constitutes a merger, notification requirements under the Federal Competition and Consumer Protection Act 2018 must be considered. The company secretary must witness the transfer and ensure proper documentation is maintained in the company's statutory records.