Share Transfer Agreement for Philippines

Share Transfer Agreement Template for Philippines

A comprehensive legal document governed by Philippine law that formalizes the transfer of shares from one party (transferor) to another (transferee). This agreement is structured in compliance with the Revised Corporation Code of the Philippines and Securities Regulation Code, detailing the terms and conditions of the share transfer, including purchase price, payment terms, warranties, and completion requirements. The document includes necessary provisions for regulatory compliance, tax considerations, and corporate approvals specific to the Philippine jurisdiction, while also addressing any foreign ownership restrictions if applicable.

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What is a Share Transfer Agreement?

The Share Transfer Agreement is a crucial document used in Philippine corporate transactions when ownership of shares in a company needs to be legally transferred between parties. It serves as the primary instrument for documenting share sales and purchases, ensuring compliance with the Revised Corporation Code of the Philippines, Securities Regulation Code, and other relevant regulations. The agreement becomes necessary whenever there's a need to transfer share ownership, whether in private transactions, corporate restructuring, or investment deals. It includes essential details such as the number and class of shares being transferred, purchase price, payment terms, warranties, and various conditions that must be met for the transfer to be valid under Philippine law. The document also addresses tax implications, foreign ownership restrictions (if applicable), and necessary corporate and regulatory approvals.

What sections should be included in a Share Transfer Agreement?

1. Parties: Identification of the transferor and transferee, including complete legal names, addresses, and registration details

2. Background: Context of the transaction, including details about the company whose shares are being transferred

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

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

5. Conditions Precedent: Conditions that must be satisfied before the transfer can complete

6. Completion: Details of when, where, and how the transfer will be completed

7. Seller's Warranties: Warranties regarding ownership, authority to sell, and status of the shares

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

9. Tax Provisions: Allocation of responsibility for various taxes arising from the transfer

10. Confidentiality: Obligations to keep the transaction and related information confidential

11. Notices: Process for formal communications between parties

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

13. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

What sections are optional to include in a Share Transfer Agreement?

1. Foreign Ownership Compliance: Required when the transferee is a foreign entity, detailing compliance with Philippine foreign ownership restrictions

2. Corporate Group Provisions: Needed when the transfer involves related companies within a corporate group

3. Security Provisions: Required when payment is to be made in installments or subject to security arrangements

4. Competition Compliance: Needed when the transfer size requires Philippine Competition Commission approval

5. Employee Matters: Required when the transfer affects existing employment arrangements or employee share schemes

6. Intellectual Property Rights: Needed when the company's IP assets are significant to the transaction value

7. Non-Competition Covenants: Optional restrictions on the seller's future business activities

What schedules should be included in a Share Transfer Agreement?

1. Share Details: Detailed description of the shares being transferred, including share certificates numbers and dates

2. Company Information: Key details about the company including corporate structure, capitalization, and material contracts

3. Warranties: Detailed warranties and representations by the seller regarding the company and shares

4. Completion Requirements: Checklist of documents and actions required for completion

5. Corporate Approvals: Copies of relevant board resolutions and shareholder approvals

6. Regulatory Filings: Forms and documents required for SEC and other regulatory notifications

7. Existing Encumbrances: Details of any existing liens or encumbrances on the shares

8. Payment Schedule: If applicable, detailed schedule of installment payments and terms

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

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use

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