Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only

This Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only is drafted for a company with two shareholders, where only one shareholder is selling their shares to an outside third party.

The continuing shareholder keeps their shareholding but joins as a party to the SPA to provide the buyer with some ongoing comfort in relation to the company. The buyer therefore acquires only a percentage of the existing shares.

What does Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only do?

It documents the terms on which one shareholder sells their shares to a buyer, with the other shareholder remaining invested in the company and participating as a party to the agreement.

When should you use Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only?

This agreement is drafted on the assumption that:

• There are two existing shareholders (A and B), each holding 50% of the current issued share capital.
• Shareholder A sells all their shares (50%) to the buyer.
• Shareholder B keeps all their shares (50%) in the company and joins as a party to provide the buyer with comfort in relation to the company.
• There is no issue of new share capital (this is a sale of existing shares).
• Limited warranties are given on the basis that the sale is to a known third party familiar with the shareholders and the company.
• Both A and B give warranties.
• No tax provisions or tax warranties are included and independent tax advice should be sought.

This template can be adjusted where there is more than one selling shareholder and the percentage holdings can be amended to suit the company’s circumstances.

What does Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only cover?

This is a short-form, basic agreement. It includes provisions on:

• The sale and purchase of the sale shares and the purchase price
• Conditions and completion
• Warranties and limitations on claims
• Confidentiality and non-competition
• Standard contractual terms, including governing law and jurisdiction

It also includes schedules covering the company, consideration, post-completion shareholdings, and warranties.

Share Sale & Purchase Agreement – Sale of Shares by One Shareholder only is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.