Shares Purchase Agreement for Malaysia

Shares Purchase Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that documents the terms and conditions for the purchase and sale of shares in a company. This agreement outlines the purchase price, payment terms, warranties, representations, conditions precedent, and completion mechanics. It incorporates specific requirements under the Malaysian Companies Act 2016 and other relevant Malaysian legislation, including necessary stamping requirements under the Stamp Act 1949. The document provides legal protection for both parties and ensures compliance with Malaysian corporate and securities laws while detailing all aspects of the share transfer process.

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What is a Shares Purchase Agreement?

The Share Purchase Agreement is a crucial legal document used in Malaysian corporate transactions when one party wishes to acquire shares in a company from another party. It is essential for both private and public company transactions, though additional requirements may apply for public listed companies under Malaysian securities laws. The agreement typically includes detailed provisions on purchase price, payment mechanisms, conditions precedent, warranties, and indemnities, all structured to comply with Malaysian legal requirements. It must adhere to the Companies Act 2016, Capital Markets and Services Act 2007 (where applicable), and other relevant Malaysian legislation. This document is particularly important as it provides legal certainty and protection for both buyer and seller, clearly documenting their rights and obligations in the share transfer process.

What sections should be included in a Shares Purchase Agreement?

1. Parties: Identification of the seller(s) and buyer(s) with full legal names and details

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

3. Definitions and Interpretation: Defined terms used throughout the agreement and rules of interpretation

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

5. Purchase Price and Payment: Detailed terms of consideration, payment method, and timing

6. Conditions Precedent: Prerequisites that must be satisfied before completion

7. Pre-Completion Obligations: Parties' obligations between signing and completion

8. Completion: Mechanics and requirements for closing the transaction

9. Warranties: Seller's representations and warranties about the shares and target company

10. Limitations on Seller's Liability: Scope and limitations of seller's liability under the warranties

11. Confidentiality: Obligations regarding confidential information

12. Announcements: Requirements for public statements about the transaction

13. Further Assurance: Obligations to take additional steps to give effect to the agreement

14. Notices: Process for formal communications between parties

15. Governing Law and Jurisdiction: Malaysian law as governing law and jurisdiction for disputes

16. General Provisions: Standard boilerplate clauses including entire agreement, variations, etc.

What sections are optional to include in a Shares Purchase Agreement?

1. Tag-Along Rights: Used when minority shareholders need protection to sell their shares alongside majority shareholders

2. Drag-Along Rights: Included when majority shareholders want the right to force minority shareholders to join in a sale

3. Non-Competition: Required when seller needs to be restricted from competing post-completion

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

5. Employee Matters: Needed when transaction affects key employees or employment arrangements

6. Tax Covenant: Detailed tax indemnities when specific tax risks need to be addressed

7. Break Fee: Included when parties want to specify compensation for transaction failure

8. Escrow Arrangements: Used when part of purchase price needs to be held in escrow

9. Regulatory Compliance: Required for regulated industries or when specific regulatory approvals needed

What schedules should be included in a Shares Purchase Agreement?

1. Details of the Target Company: Corporate information, share capital structure, and other company details

2. Shares Being Sold: Detailed description of shares including share numbers and classes

3. Warranties: Comprehensive list of seller's warranties about the company and business

4. Properties: Details of real estate owned or leased by the target company

5. Intellectual Property: List of IP rights owned or licensed by the target company

6. Material Contracts: Summary of key contracts affecting the business

7. Employee Information: Details of employees, benefits, and employment terms

8. Completion Requirements: Detailed list of documents and actions required at completion

9. Disclosed Matters: Information disclosed against the warranties

10. Form of Resignation Letters: Template resignation letters for outgoing directors

11. Board Resolutions: Form of required corporate approvals

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

Malaysia

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Retail

Healthcare

Energy

Telecommunications

Professional Services

Education

Agriculture

Mining

Construction

Transportation

Hospitality

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Risk Management

Corporate Secretarial

Board of Directors

Executive Management

Investment

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Lawyer

Legal Counsel

Company Secretary

Financial Director

Mergers & Acquisitions Director

Investment Manager

Corporate Finance Manager

Business Development Director

Risk Manager

Compliance Officer

Board Director

Managing Director

Finance Manager

Investment Banker

Private Equity 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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