Stock Purchase Agreement for Nigeria

Stock Purchase Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that documents the terms and conditions for the sale and purchase of shares in a company. The agreement details the transaction specifics including purchase price, warranties, representations, and conditions precedent, while ensuring compliance with Nigerian corporate law, particularly the Companies and Allied Matters Act (CAMA) 2020. It includes provisions for share transfer mechanics, seller and buyer obligations, completion requirements, and various protections for both parties, adapted to meet Nigerian regulatory requirements and business practices.

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What is a Stock Purchase Agreement?

The Stock Purchase Agreement serves as the primary legal document for share transfer transactions in Nigeria, structured in accordance with the Companies and Allied Matters Act (CAMA) 2020 and other relevant Nigerian legislation. This document is essential when acquiring or disposing of shares in a Nigerian company, whether for complete or partial ownership transfers. It provides comprehensive coverage of the transaction terms, including purchase price, payment mechanisms, warranties, representations, conditions precedent, and completion requirements. The agreement is particularly important in protecting both buyers' and sellers' interests while ensuring regulatory compliance, especially considering Nigerian corporate law requirements and, where applicable, foreign investment regulations. It's commonly used in both private and public company transactions, though the specific requirements and complexity may vary based on the transaction size and nature.

What sections should be included in a Stock Purchase Agreement?

1. Parties: Identification of the Seller(s), Buyer(s), and the Company whose shares are being sold

2. Background: Recitals explaining the context of the transaction and the parties' intentions

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

4. Sale and Purchase: Core transaction terms including the number of shares, purchase price, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before completion of the transaction

6. Completion: Details of when, where, and how the transfer will be completed, including actions required at completion

7. Seller's Warranties: Warranties regarding the shares, the company, and the seller's capacity to sell

8. Buyer's Warranties: Warranties regarding the buyer's capacity and authority to purchase

9. Limitations on Liability: Limitations on the parties' liability under the warranties and indemnities

10. Confidentiality: Obligations regarding confidential information and announcements

11. Notices: Process for giving formal notices under the agreement

12. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

13. Execution: Signature blocks and execution formalities

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

1. Pre-Completion Covenants: Used when there's a gap between signing and completion, specifying how the business should be operated during this period

2. Post-Completion Covenants: Used when specific obligations need to be fulfilled after completion, such as non-compete provisions

3. Tax Covenants: Detailed tax-related provisions, particularly important for larger transactions or where tax risks are identified

4. Employee Matters: Used when specific arrangements for key employees need to be addressed

5. Regulatory Compliance: Required when the transaction needs specific regulatory approvals or compliance measures

6. Foreign Investment Provisions: Required when the buyer is a foreign entity, addressing NIPC requirements

7. Break Fee: Used in larger transactions to specify compensation if the deal fails under certain circumstances

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

What schedules should be included in a Stock Purchase Agreement?

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

2. Purchase Price Calculation: Detailed breakdown of the purchase price and any adjustments

3. Completion Obligations: Detailed list of documents and actions required at completion

4. Warranties: Detailed warranties about the company and its business

5. Company Information: Key details about the company including corporate information, assets, and liabilities

6. Encumbrances: List of any existing encumbrances on the shares or company assets

7. Material Contracts: List and details of the company's material contracts

8. Property: Details of any real property owned or leased by the company

9. Intellectual Property: Schedule of company's intellectual property rights

10. Disclosure Letter: Seller's disclosures against the warranties

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

Nigeria

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Clauses
Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Energy

Healthcare

Agriculture

Telecommunications

Mining

Retail

Professional Services

Construction

Education

Transportation

Media and Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Investment

Compliance

Risk Management

Corporate Secretariat

Strategy

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Lawyer

Investment Banker

Company Secretary

Managing Director

Finance Director

Mergers & Acquisitions Manager

Corporate Development Manager

Business Development Director

Investment Manager

Private Equity Manager

Venture Capital Manager

Risk Manager

Compliance Officer

Board Director

Corporate Strategy Manager

Industries
Companies and Allied Matters Act (CAMA) 2020: The primary legislation governing company operations, share transfers, and corporate transactions in Nigeria. It provides the fundamental framework for company registration, share transfers, and corporate governance.
Investment and Securities Act 2007: Regulates securities trading, including the sale and transfer of shares. It provides guidelines for securities transactions and requirements for proper documentation.
Nigerian Investment Promotion Commission Act: Relevant for transactions involving foreign investors, providing regulations on foreign ownership of Nigerian companies and registration requirements.
Stamp Duties Act: Requires stamp duty to be paid on instruments relating to the transfer of shares and other securities.
Capital Gains Tax Act: Governs the taxation of gains arising from the disposal of shares and other assets.
Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: Relevant for cross-border transactions involving foreign currency payments for share purchases.
Nigerian Contract Law: General principles of contract law that govern the formation and enforcement of agreements, including offer, acceptance, consideration, and capacity.
Corporate Affairs Commission (CAC) Regulations: Administrative regulations governing the registration and filing requirements for share transfers and corporate transactions.
Securities and Exchange Commission (SEC) Rules: Provides detailed regulations for securities transactions, especially for public companies or large private transactions.
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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