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Business Share Purchase Agreement

Business Share Purchase Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Business Share Purchase Agreement

"I need a Business Share Purchase Agreement for the acquisition of a 60% stake in a Saudi healthcare company, with completion scheduled for March 2025, including specific provisions for medical licensing transfer and regulatory compliance with Saudi Ministry of Health requirements."

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Document background
The Business Share Purchase Agreement is a crucial document used in Saudi Arabia when transferring ownership of shares in a company from one party to another. It must comply with Saudi Companies Law, Capital Market regulations, and Sharia principles, making it distinct from similar agreements in other jurisdictions. This agreement is essential for documenting the terms of the transaction, including purchase price, payment mechanisms, warranties, and indemnities. It typically includes detailed provisions for regulatory approvals, conditions precedent, and completion mechanics specific to Saudi Arabian business practices. The document serves both as a binding legal instrument and as a reference point for post-completion obligations, making it vital for both immediate transaction purposes and long-term business relationships.
Suggested Sections

1. Parties: Identification of the Seller(s), Buyer(s), and the Target Company, including full legal names and registration details

2. Background: Context of the transaction, including current ownership structure and purpose of the transfer

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Sharia-compliant terminology where relevant

4. Sale and Purchase: Core transaction terms including number of shares, percentage of ownership being transferred, and purchase price

5. Purchase Price and Payment: Detailed payment terms, payment mechanism, and any adjustments to the purchase price

6. Conditions Precedent: Prerequisites that must be satisfied before completion, including regulatory approvals and third-party consents

7. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business requirements

8. Completion: Mechanics of completion, including timing, location, and actions required at completion

9. Seller's Warranties: Warranties given by the seller regarding the shares, target company, and business

10. Buyer's Warranties: Basic warranties from the buyer regarding capacity and authority to enter into the transaction

11. Limitations on Liability: Limitations on warranty claims and general liability of the parties

12. Confidentiality: Obligations regarding transaction confidentiality and company information

13. Announcements: Rules for making public announcements about the transaction

14. Post-Completion Obligations: Obligations after completion, including transitional arrangements

15. Governing Law and Dispute Resolution: Saudi law as governing law and dispute resolution mechanisms

Optional Sections

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

2. Drag Along Rights: Include when majority shareholders need the right to force minority shareholders to join in a sale

3. Non-Competition: Include when sellers need to be restricted from competing with the target business

4. Employee Matters: Include when the transaction affects employment relationships or requires specific employee arrangements

5. Tax Covenant: Include when specific tax indemnities or arrangements are required

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

7. Break Fee: Include when there needs to be compensation for transaction failure

8. Foreign Investment Provisions: Include when foreign investors are involved and specific regulations apply

Suggested Schedules

1. Details of the Target Company: Company information including registration details, share capital, and current shareholders

2. Conditions Precedent: Detailed list of all conditions that must be satisfied before completion

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

4. Warranties: Detailed warranties regarding the company, business, and shares

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

6. Intellectual Property: Schedule of all IP owned or licensed by the target company

7. Material Contracts: List and details of key contracts of the target company

8. Employees: Details of key employees and their terms of employment

9. Financial Statements: Recent financial statements of the target company

10. Data Room Index: Index of documents disclosed during due diligence

11. Disclosure Letter: Specific 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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Approval
Board
Business
Business Day
Buyer
Capital Market Authority
Companies Law
Completion
Completion Date
Conditions Precedent
Confidential Information
Consideration
Control
Data Room
Disclosure Letter
Encumbrance
Financial Statements
Governmental Authority
Group
Guarantor
Intellectual Property
Liabilities
Long Stop Date
Loss
Material Adverse Change
Material Contracts
Ministry of Commerce
Parties
Purchase Price
Related Party
Relevant Authority
Sale Shares
SAMA
Seller
Shareholders Agreement
Shares
Signing Date
Subsidiary
Target Company
Tax
Tax Authority
Third Party
Transaction
Transaction Documents
Transfer
Warranties
Zakat
Working Day
Clauses
Interpretation
Definitions
Sale and Purchase
Purchase Price
Payment Terms
Conditions Precedent
Pre-completion Obligations
Completion
Post-completion Obligations
Warranties
Indemnification
Limitations on Liability
Confidentiality
Non-competition
Non-solicitation
Tax Matters
Employee Matters
Regulatory Compliance
Shareholder Rights
Share Transfer Restrictions
Tag-along Rights
Drag-along Rights
Board Representation
Business Operation
Information Rights
Assignment
Force Majeure
Termination
Announcements
Notices
Costs
Further Assurance
Entire Agreement
Amendments
Severability
Waiver
Third Party Rights
Counterparts
Governing Law
Dispute Resolution
Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Healthcare

Retail

Energy

Transportation

Construction

Professional Services

Telecommunications

Education

Hospitality

Industrial

Agriculture

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Board of Directors

Executive Leadership

Investment

Due Diligence

Corporate Secretariat

Risk Management

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Corporate Lawyer

Legal Counsel

Investment Director

Business Development Manager

Company Secretary

Finance Director

Compliance Officer

Corporate Development Manager

Board Member

Shareholder

Investment Manager

Due Diligence Manager

Transaction Advisory Manager

Industries
Companies Law (2015): The primary legislation governing corporate entities and transactions in Saudi Arabia, including share transfers, corporate governance, and shareholder rights
Capital Market Law (2003): Regulates securities, listed companies, and stock market transactions if the target company is listed on the Saudi Stock Exchange (Tadawul)
Foreign Investment Law: Governs foreign ownership of Saudi companies and related investment restrictions, particularly relevant if any party is non-Saudi
Competition Law (2019): Regulates market competition and must be considered for merger control and anti-trust compliance
Commercial Courts Law: Provides the framework for commercial dispute resolution and enforcement of commercial contracts
Zakat, Tax and Customs Authority (ZATCA) Regulations: Governs tax implications of share transfers, including capital gains tax and zakat requirements
Anti-Money Laundering Law: Requires compliance with AML regulations and due diligence requirements in business transactions
Labor Law: May be relevant if the share purchase affects employment relationships or involves transfer of employees
Sharia Principles: Islamic law principles that underpin Saudi legal system and must be considered in all commercial 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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