Redemption Agreement Template for Singapore

A Redemption Agreement sets out the terms and conditions for a company to buy back its own shares from shareholders under Singapore's Companies Act. This legally binding contract protects both the company and selling shareholders by clearly stating the share price, payment timing, and transfer process.

Small and medium enterprises in Singapore often use these agreements for business succession planning or when shareholders exit. The agreement must comply with the company's constitution and solvency requirements under local law. It's particularly useful when companies need to manage ownership changes while maintaining control over who holds their shares.

Consider using a Redemption Agreement when your Singapore company needs to buy back shares from departing shareholders or restructure ownership. This agreement becomes essential during business succession planning, shareholder exits, or when managing share capital to meet regulatory requirements.

The agreement proves particularly valuable when resolving shareholder disputes, facilitating retirement transitions, or implementing employee share buyback schemes. It helps maintain company stability by providing a clear framework for share transfers while ensuring compliance with Singapore's Companies Act solvency requirements and capital maintenance rules.

• Standard Share Redemption: Used for basic share buybacks, outlining price, payment terms, and transfer mechanics
• Employee Share Scheme Redemption: Specifically designed for employee share ownership plans with vesting conditions and buyback triggers
• Compulsory Redemption: Details mandatory share repurchases based on predetermined events or company constitution requirements
• Staged Redemption: Structures gradual share buybacks over time, often used in succession planning
• Redeemable Preference Share: Handles redemption of preference shares with special dividend and voting rights under Singapore law

• Company Directors: Initiate and approve the Redemption Agreement, ensuring compliance with solvency requirements and corporate governance
• Selling Shareholders: Agree to sell their shares back to the company under specified terms and conditions
• Corporate Secretaries: Handle documentation, filing requirements, and updating the company's share register
• Legal Counsel: Draft and review agreements to ensure compliance with Singapore's Companies Act and relevant regulations
• Financial Advisors: Assist in share valuation and verify the company's ability to meet financial obligations

• Company Details: Gather constitution, shareholding structure, and latest ACRA records
• Share Information: Document number and class of shares, redemption price, and payment terms
• Financial Assessment: Confirm company meets solvency requirements under Singapore law
• Board Approval: Obtain directors' resolution authorizing the share redemption
• Shareholder Details: Collect selling shareholders' particulars and verification documents
• Redemption Terms: Define timing, conditions, and completion mechanics clearly
• Documentation: Use our platform to generate a compliant agreement that includes all required elements

• Parties and Recitals: Full legal names, company registration details, and transaction background
• Share Details: Precise description of shares, quantity, class, and share certificate numbers
• Redemption Price: Clear statement of consideration and payment terms
• Completion Mechanics: Timeline, transfer procedures, and documentary requirements
• Warranties: Share ownership, authority to sell, and compliance with Companies Act
• Conditions Precedent: Solvency statement, board approval, and regulatory clearances
• Governing Law: Singapore law jurisdiction and dispute resolution provisions

A Redemption Agreement differs significantly from a Business Acquisition Agreement, though both involve transferring ownership interests. While a Redemption Agreement specifically handles a company buying back its own shares from shareholders, a Business Acquisition Agreement covers the broader purchase of an entire business or its assets.

• Transaction Scope: Redemption Agreements focus solely on share buybacks under Singapore's Companies Act, while Business Acquisition Agreements cover entire business transfers, including assets, liabilities, and operations
• Regulatory Requirements: Redemption Agreements must meet specific solvency tests and capital maintenance rules, whereas Business Acquisition Agreements focus on transfer of ownership and due diligence
• Parties Involved: Redemption Agreements are between a company and its shareholders, while Business Acquisition Agreements involve separate buying and selling entities
• Documentation Needs: Redemption Agreements require board resolutions and solvency statements, while Business Acquisition Agreements need extensive due diligence records and asset schedules