Sale Of Shares Agreement for the United Kingdom

Sale Of Shares Agreement Template for England and Wales

A legally binding agreement governed by the laws of England and Wales that documents the sale and transfer of shares from one party to another. It sets out the terms and conditions of the share transfer, including purchase price, warranties, representations, and completion mechanics. The agreement includes provisions for protecting both parties' interests and ensures compliance with UK company law and financial regulations.

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What is a Sale Of Shares Agreement?

A Sale Of Shares Agreement is a crucial document used when transferring ownership of shares in a company. Under English and Welsh law, this agreement serves as the primary instrument for documenting share transactions, whether for partial or complete ownership transfers. It typically includes detailed provisions about the sale price, payment terms, warranties about the company's condition, and various protections for both parties. The agreement is essential for ensuring legal compliance with the Companies Act 2006 and other relevant UK legislation, while also providing clarity and certainty for all parties involved in the transaction.

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

1. Parties: Identifies and defines the seller(s) and buyer(s) of the shares

2. Background: Context of the transaction and brief company history

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including price and shares being sold

5. Completion: Details of when and how the transfer will complete

6. Warranties: Seller's representations about the company and shares

7. Confidentiality: Obligations regarding transaction confidentiality

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

1. Pre-completion Conditions: Conditions that must be met before completion - used when specific conditions must be satisfied before sale

2. Non-compete Provisions: Restrictions on seller's future business activities - used when protecting company's business interests post-sale

3. Tax Covenant: Specific tax-related warranties and indemnities - used for larger transactions or where tax exposure is significant

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

1. Schedule 1 - Share Details: Details of shares being transferred including class and numbers

2. Schedule 2 - Warranties: Detailed warranties about the company and business

3. Schedule 3 - Company Information: Key company details including assets, contracts, and employees

4. Schedule 4 - Completion Requirements: List of documents and actions required at completion

5. Schedule 5 - Disclosure Letter: Exceptions to warranties provided by seller

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

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Companies Act 2006: Primary legislation governing company operations, including share transfer provisions, company registration requirements, directors' duties, and share capital regulations

Financial Services and Markets Act 2000: Regulates financial services and markets, covering regulated investments, financial promotion rules, and market abuse regulations

Taxation of Chargeable Gains Act 1992: Governs the taxation of capital gains, including those arising from share sales

Income Tax Act 2007: Legislation covering income tax implications of share transactions

Corporation Tax Acts: Series of acts governing corporate taxation aspects of share sales

UK Takeover Code: Regulates takeovers and mergers, particularly relevant for public companies, including mandatory offer thresholds

FCA Regulations: Financial Conduct Authority regulations covering listed companies, disclosure requirements, and market abuse prevention

Common Law Contract Principles: Fundamental principles of contract law developed through case law in England and Wales

Misrepresentation Act 1967: Governs false or misleading statements made during contract formation

Money Laundering Regulations 2017: Anti-money laundering requirements including due diligence and source of funds verification

Data Protection Act 2018: UK's implementation of data protection requirements, including personal data handling and privacy regulations

UK GDPR: Post-Brexit version of the General Data Protection Regulation applicable in the UK

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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