Share Purchase Agreement Template for South Africa

A Share Purchase Agreement is a legally binding contract used when buying or selling shares in a South African company. It spells out the key terms of the share sale, including the price, payment details, and what happens before and after the deal closes.

Beyond just recording the sale price, these agreements protect both buyers and sellers under the Companies Act by laying out important promises about the company's condition, handling any regulatory approvals needed, and setting clear rules about who's responsible if problems come up later. The agreement becomes especially vital for private company transactions where shares aren't traded on the JSE.

A Share Purchase Agreement becomes essential when you're buying or selling shares in a South African private company. It's particularly important for major shareholding changes, company restructures, or when bringing new investors into your business.

The agreement protects both parties during complex transactions where shares change hands outside the JSE. It's crucial for deals involving multiple conditions, delayed payments, or when specific warranties about the company's financial health need documenting. Companies also need it to satisfy regulatory requirements under the Companies Act and Financial Intelligence Centre Act when ownership changes occur.

• Simple Share Sale Agreement: Basic version for straightforward share transfers between parties, with minimal conditions and standard warranties
• Shareholder Sale Agreement: Comprehensive agreement for complex transactions involving multiple shareholders or detailed company warranties
• Restricted Share Purchase Agreement: Specialized version for shares with trading restrictions or specific vesting conditions
• Stock Purchase Agreement: Used for larger corporate transactions, often involving complete business acquisitions or substantial shareholding changes

• Company Shareholders: Both buyers and sellers of shares, from individual investors to large corporations, who need to document their ownership transfer terms
• Corporate Lawyers: Draft and review the agreements to ensure compliance with South African company law and protect their clients' interests
• Company Directors: Sign off on share transfers and ensure proper corporate governance procedures are followed
• Company Secretaries: Maintain share registers, update company records, and handle regulatory filings after the transfer
• Financial Advisors: Guide clients on transaction structuring and valuation aspects of the share purchase

• Company Details: Gather the company registration number, registered address, and current shareholding structure
• Share Information: Document the number, class, and price of shares being transferred, plus any special rights attached
• Party Information: Collect full legal names, ID numbers, and contact details of all buyers and sellers
• Due Diligence: Review company financials, existing shareholder agreements, and any transfer restrictions
• Regulatory Checks: Confirm FICA compliance requirements and B-BBEE implications of the transfer
• Document Generation: Use our platform to create a legally-sound agreement that includes all required elements under South African law

• Party Details: Full legal names, registration numbers, and addresses of all buyers, sellers, and the company
• Share Specifics: Precise description of shares being sold, including class, number, and price per share
• Payment Terms: Clear payment structure, timing, and method of transfer
• Warranties: Seller's guarantees about company status, share ownership, and financial condition
• Conditions: Any requirements that must be met before the sale completes
• Governing Law: Explicit statement that South African law applies and jurisdiction for disputes
• Signatures: Space for all parties to sign, with witnesses as required by Companies Act

A Share Purchase Agreement differs significantly from an Asset Purchase Agreement in both scope and legal implications under South African law. While both involve business transactions, they serve distinct purposes and carry different consequences.

• Transaction Focus: Share Purchase Agreements transfer company ownership through share sales, while Asset Purchase Agreements deal with specific business assets, equipment, or property
• Legal Implications: Share deals transfer all company liabilities with the shares, but asset deals let buyers choose specific assets without assuming all company obligations
• Tax Treatment: Share transfers attract Securities Transfer Tax, while asset sales typically involve VAT and transfer duties
• Regulatory Requirements: Share transfers need Companies Act compliance and possible Competition Commission approval, while asset sales focus more on property law and specific asset registration