Why do I need an Agreement for Sale and Purchase of Shares?
This agreement contains all the essential terms for the sale of a minority shareholding (ie, less than 50%) in a privately owned New Zealand company by one shareholder to someone else. If all the shares (or a majority of the shares) in a company are being sold you need our Agreement for Sale and Purchase of Shares (all or a majority).
Recording the key terms of the share sale in a written agreement ensures both parties clearly understand what shares are being sold, how much the buyer is paying and when payment is due, what consents, approvals or conditions need to be obtained or satisfied, and the requirements and process on completion. Using our agreement for sale and purchase will also give the buyer assurance about the ownership and status of the shares through various statements made by the seller in the agreement (known as warranties). If these warranties are found to be inaccurate, the buyer may have a legal claim against the seller. A seller will want to limit its potential liability for these claims.
A simple, clear and well-drafted agreement for sale and purchase reduces misunderstandings and the potential for disputes.
What’s in an Agreement for Sale and Purchase of Shares?
NZ lawyers have created this agreement for use by NZ businesses. It is simple, easy to understand, without unnecessary legalese and fair to both sides to reduce negotiation time and keep the relationship positive.
The agreement sets out all the essential terms of a typical share sale and purchase transaction for one minority shareholding, such as purchase price, timing of payment, whether the seller will be assigning its shareholder current account (ie, money owed by the company to the shareholder) to the buyer, conditions and optional non-competition and non-solicitation restraints.
How long will it take to create my document?
10-15 minutes – anywhere, anytime! You need to complete the Q&A within one month (following that your access will expire). Please reach out to us at hello@onyourterms.co.nz if you have any issues. During this access period, you can come back and re-input your answers to the questions to reflect any positions you have negotiated (to generate an amended document).
What information do I need to complete the Q&A?
- The name and contact details of the seller and buyer
- Purchase price and payment terms (will a deposit be paid?)
- Will the seller be assigning its shareholder current account (ie, money owed by the company to the shareholder), and if so, what is the value of this debt?
- Conditions – such as due diligence, buyer finance or the buyer agreeing to the existing shareholders’ agreement (or a new shareholders’ agreement) and the date these conditions need to be met
- Completion date (also known as settlement date)
- Optional non-competition and non-solicitation terms – will the seller be prevented from competing with the business or encouraging clients or staff to terminate or reduce their dealings with the business for a fixed time (and in a certain area) after completion?
What if I need help?
On Your Terms has teamed up with Luminate Legal to offer its customers the option of obtaining legal advice from a lawyer to provide extra assurance and peace of mind. If you would like to ask a lawyer some quick questions about your document (or your responses to the Q&A), or have your document reviewed/edited by a lawyer, click here to view and select Luminate Legal's packages and fixed-fee pricing exclusively for On Your Terms customers.
What do I do once my Agreement for Sale and Purchase of Shares is created?
As soon as you download the agreement, it is ready to be signed (or negotiated and then signed). Your document will be in Word, so you can amend it if necessary. During your access period to the product, you can also re-input answers to reflect negotiated positions.
Other helpful information:
- Read our helpful blog: How to transfer shares in a New Zealand company
- You may also find these bundles or documents useful for your business: Term sheet for Shareholders' Agreement, Company Constitution, Shareholders' Agreement and Constitution Bundle, Deed of Accession to Shareholders' Agreement, Mutual Confidentiality Agreement, Term Sheet for Sale and Purchase of Shares (one minority shareholding), Transfer of Company Shares and Approvals Bundle, Shareholders' Agreement
- Check out our FAQs here
If you’re unsure whether this agreement is what you need, reach out to us at hello@onyourterms.co.nz – we’re happy to help!
If you’re not satisfied with your purchase of this product for any reason, let us know why within 10 days of your purchase and we’ll work with you to make sure you’re happy, including giving you a full refund if necessary.
Disclaimer: On Your Terms was created to provide fast, easy and affordable access to legal information and documentation. We are not a law firm and do not provide legal advice. The information and documents we provide are of a general nature, designed for common situations, and may not be suitable for your needs or circumstances. If you need legal advice, we have a network of specialist law firm partners able to help you here.