Sale Of Shares Agreement for Germany

Sale Of Shares Agreement Template for Germany

This document is a comprehensive legal agreement governed by German law that facilitates the transfer of ownership of shares from one party (the seller) to another (the buyer). It incorporates specific requirements of German corporate law, including provisions from the German Civil Code (BGB), Commercial Code (HGB), and relevant corporate statutes. The agreement details the terms and conditions of the share sale, including purchase price, warranties, representations, closing conditions, and post-closing obligations, while ensuring compliance with German regulatory requirements and market practice.

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What is a Sale Of Shares Agreement?

The Sale Of Shares Agreement is a crucial document used in corporate transactions under German law when transferring ownership of shares in a company. This agreement is essential for both private and public company transactions, though specific requirements may vary based on the company type (GmbH or AG). It outlines all critical aspects of the share transfer, including purchase price, payment terms, warranties, and conditions precedent. The document must comply with German corporate law requirements, including mandatory notarization in certain cases. It typically includes comprehensive warranties about the target company's business, financial position, and legal status, along with specific indemnities and liability provisions. The agreement also addresses tax implications, regulatory approvals, and post-closing obligations, making it a fundamental tool for corporate restructuring, investment, and divestment transactions.

What sections should be included in a Sale Of Shares Agreement?

1. Parties: Identification of the seller(s) and buyer(s), including full legal names, registration details, and addresses

2. Background: Context of the transaction, including description of the target company and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

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

5. Purchase Price: Detailed provisions on consideration, payment terms, and adjustment mechanisms

6. Closing: Conditions precedent, closing mechanics, and timing

7. Seller's Warranties: Standard warranties regarding share ownership, company status, and business operations

8. Buyer's Warranties: Basic warranties from buyer regarding capacity and authority to enter into transaction

9. Covenants: Pre-closing and post-closing obligations of the parties

10. Liability and Indemnification: Provisions regarding breach of warranties, indemnification obligations, and limitations of liability

11. Confidentiality: Obligations regarding confidential information and announcement of the transaction

12. Governing Law and Jurisdiction: Specification of German law as governing law and jurisdiction for disputes

13. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

What sections are optional to include in a Sale Of Shares Agreement?

1. Management Provisions: Required when existing management agreements need to be addressed or new arrangements established

2. Non-Competition: Include when seller needs to be restricted from competing with the target business

3. Tax Covenant: Detailed section needed for complex tax arrangements or specific tax indemnities

4. Employee Matters: Required when specific employment arrangements need to be addressed

5. Intellectual Property: Detailed section needed when IP is a significant asset of the target company

6. Real Estate: Include when the target company has significant real estate holdings

7. Bank Financing: Required when transaction involves external financing arrangements

8. Earn-out Provisions: Include when part of purchase price is contingent on future performance

What schedules should be included in a Sale Of Shares Agreement?

1. Share Details: Details of shares being transferred, including share certificates and shareholder registers

2. Disclosed Information: List of all documents and information provided during due diligence

3. Warranties: Detailed warranties and any specific disclosures against them

4. Company Information: Details of the target company, including corporate documents and structure

5. Properties: List and details of all real estate owned or leased by the company

6. Material Contracts: List and copies of all material contracts of the target company

7. Intellectual Property: Schedule of all IP rights owned or licensed by the company

8. Employees: List of employees and their key employment terms

9. Closing Documents: Forms of all documents required to be delivered at closing

10. Net Working Capital Calculation: Methodology and example calculation for working capital adjustments

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology

Manufacturing

Real Estate

Financial Services

Healthcare

Retail

Energy

Transportation

Professional Services

Media and Entertainment

Telecommunications

Construction

Agriculture

Mining

Education

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Tax

Compliance

Risk Management

Treasury

Corporate Secretariat

Business Development

Executive Management

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

Corporate Lawyer

Investment Director

Mergers & Acquisitions Manager

Corporate Development Manager

Financial Controller

Tax Director

Company Secretary

Business Development Director

Investment Banker

Corporate Finance Manager

Due Diligence Specialist

Compliance Officer

Risk Manager

Industries
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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