Agreement For Transfer Of Shares for the United Kingdom

Agreement For Transfer Of Shares Template for England and Wales

A legally binding document governed by English and Welsh law that facilitates the transfer of ownership of shares from one party (transferor) to another (transferee). The agreement sets out the terms and conditions of the transfer, including the number and class of shares, consideration paid, warranties given by the transferor, and completion mechanics. It ensures compliance with the Companies Act 2006 and other relevant legislation while protecting both parties' interests.

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What is a Agreement For Transfer Of Shares?

An Agreement For Transfer Of Shares is a crucial document used when ownership of shares in a company needs to be transferred from one party to another. Under English and Welsh law, this agreement provides the legal framework for the transaction, ensuring compliance with the Companies Act 2006 and related regulations. It is commonly used in various scenarios including business restructuring, investment rounds, employee share schemes, and exit arrangements. The agreement typically includes details of the shares being transferred, purchase price, warranties about the shares and the company, and completion mechanics. It's essential for protecting both parties' interests and maintaining proper corporate records.

What sections should be included in a Agreement For Transfer Of Shares?

1. Parties: Details of the transferor and transferee, including full legal names, registration numbers (if companies), and addresses

2. Background: Context of the transfer, details about the company whose shares are being transferred, and purpose of the agreement

3. Definitions: Key terms used throughout the agreement including defined terms for Shares, Completion Date, Purchase Price, etc.

4. Sale and Purchase: Core terms of the share transfer including the agreement to sell and purchase the shares

5. Consideration: Purchase price, payment terms, method of payment, and any adjustments to the consideration

6. Completion: Details of when and where completion will take place, and what will happen at completion

7. Warranties: Basic warranties about share ownership, authority to sell, and title to shares

8. Further Assurance: Obligation to execute further documents and take additional steps if needed

9. Governing Law and Jurisdiction: Specification that English and Welsh law governs the agreement and courts have jurisdiction

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

1. Pre-completion Conditions: Used when the transfer is subject to specific conditions being met, such as regulatory approvals or third-party consents

2. Extended Warranties: Additional warranties about company's business, assets, and liabilities - typically used in larger transactions

3. Tax Covenants: Specific provisions dealing with tax liabilities and indemnities, required for transfers with significant tax implications

4. Non-compete Provisions: Restrictions on seller's future activities, typically used when seller has significant knowledge of the business

5. Confidentiality: Provisions regarding confidentiality of the transaction and company information, used in sensitive transactions

What schedules should be included in a Agreement For Transfer Of Shares?

1. Schedule 1 - Share Details: Detailed description of shares being transferred including class, number, nominal value, and percentage of total share capital

2. Schedule 2 - Company Information: Key details about the company including registered office, directors, share capital structure, and subsidiaries

3. Schedule 3 - Warranties: Detailed warranties about the company and its business (if extensive warranties are required)

4. Schedule 4 - Completion Requirements: List of documents to be delivered and actions to be taken at completion

5. Schedule 5 - Form of Stock Transfer Form: Standard form for transferring shares in accordance with Stock Transfer Act 1963

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

England and Wales

Publisher

Genie AI

Cost

Free to use
Industries

Companies Act 2006: Primary legislation governing company operations including share transfer provisions (Part 21), share capital requirements, directors' duties, company registration requirements, and pre-emption rights

Financial Services and Markets Act 2000: Regulatory framework for financial services companies, relevant if the shares are in a regulated company and for compliance with requirements for regulated activities

Stamp Duty Legislation: Including Finance Act 1986 and Stamp Act 1891, covering tax implications and stamp duty requirements for share transfers

Companies (Model Articles) Regulations 2008: Regulations concerning standard articles of association and potential restrictions on share transfers within company articles

Data Protection Act 2018 and UK GDPR: Legislative framework for handling personal information of parties involved in the share transfer

Money Laundering Regulations 2017: Requirements for due diligence and verification of source of funds in share transfer transactions

Enterprise Act 2002: Competition law considerations, particularly relevant if the share transfer could raise competition issues

Contract Law and Misrepresentation Act 1967: Common law principles governing contract formation and statutory provisions regarding misrepresentation

Tax Legislation: Various tax laws covering Capital Gains Tax, Income Tax, and Corporation Tax implications of share transfers

Stock Transfer Act 1963: Legislation setting out formal requirements for executing share transfers

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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