Shareholder Buy Sell Agreement for Singapore

Shareholder Buy Sell Agreement Template for Singapore

A Shareholder Buy-Sell Agreement under Singapore law is a legally binding contract that establishes the framework for future share transfers within a company. It sets out the terms and conditions under which shareholders can sell their shares, who can purchase them, and how they will be valued. The agreement typically includes provisions for triggering events such as death, disability, retirement, or voluntary departure, and ensures compliance with Singapore's Companies Act and related legislation.

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What is a Shareholder Buy Sell Agreement?

The Shareholder Buy-Sell Agreement is a crucial document for Singapore companies with multiple shareholders, providing a clear framework for managing ownership transitions. It helps prevent disputes by establishing predetermined procedures for share transfers, protecting both the company and individual shareholders. This agreement is particularly important for maintaining business continuity, ensuring fair treatment of departing shareholders, and protecting the interests of remaining shareholders. Under Singapore law, it must comply with the Companies Act 1967 and related regulations, while addressing specific circumstances such as death, retirement, or voluntary exit of shareholders.

What sections should be included in a Shareholder Buy Sell Agreement?

1. Parties: Identification of all shareholders and the company

2. Background: Context of the agreement and current shareholding structure

3. Definitions: Key terms used throughout the agreement

4. Transfer Restrictions: Basic rules governing share transfers including right of first refusal and transfer process

5. Trigger Events: Events triggering buy-sell provisions including death, disability, retirement, termination of employment

6. Valuation Mechanism: Method for determining share price and frequency of valuations

7. Payment Terms: Structure and timing of payments, including any installment provisions

8. Governing Law: Specification of Singapore law as governing law and jurisdiction

What sections are optional to include in a Shareholder Buy Sell Agreement?

1. Tag-Along Rights: Optional provisions protecting minority shareholders' right to join in sale of shares

2. Drag-Along Rights: Optional provisions allowing majority shareholders to force minority shareholders to join in sale

3. Insurance Provisions: Requirements for life/disability insurance to fund potential buy-outs

4. Non-Compete Clauses: Restrictions on competing activities after a shareholder exits

What schedules should be included in a Shareholder Buy Sell Agreement?

1. Schedule 1 - Current Shareholding Structure: Detailed breakdown of current share ownership and classes of shares

2. Schedule 2 - Valuation Formula: Detailed methodology for calculating share value

3. Schedule 3 - Form of Transfer Notice: Template notice for initiating share transfers

4. Schedule 4 - Insurance Requirements: Specifications of required insurance policies and coverage amounts

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

Singapore

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Companies Act 1967: Primary legislation governing corporate entities in Singapore, including provisions for share transfers, shareholders' rights, and company management

Securities and Futures Act 2001: Regulates securities trading and financial markets; relevant for public companies or regulated securities transactions

Application of English Law Act: Contains the codified contract law principles applicable in Singapore that govern the fundamental aspects of the agreement

Stamp Duties Act 1929: Governs taxation aspects of share transfers and related transactions

Income Tax Act 1947: Addresses tax implications and considerations for share transfers and related transactions

MAS Guidelines: Regulatory guidelines from the Monetary Authority of Singapore that may apply to certain types of companies or transactions

SGX Listing Rules: Singapore Exchange regulations applicable to listed companies

Code of Corporate Governance: Guidelines for corporate governance practices that may impact shareholder agreements and company management

Share Valuation Requirements: Legal requirements and accepted methods for determining fair share value in buy-sell transactions

Trigger Events Framework: Legal framework governing events that can activate buy-sell provisions (death, disability, retirement)

Right of First Refusal Provisions: Legal requirements for implementing and exercising right of first refusal in share transfers

Foreign Ownership Regulations: Restrictions and requirements regarding foreign ownership of shares in Singapore companies

Competition Law: Anti-trust and competition regulations that may affect share ownership and transfers

Cross-Border Regulations: Legal requirements for international shareholders and cross-border share 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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