Share sale agreement templates
Learn about the key points of share sale agreements and find templates you can download and customise to your needs.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Are you thinking about selling shares? Before such a transaction can be made official, as a shareholder you'll want to get a legally-sound share sale agreement in place.
Use this guide to learn what a share sale agreement is, where to find templates and how to craft this important business document.
What is a share sale agreement?
A share sale agreement is a legal document that sets out the terms and conditions on which the shares of a company are to be sold. The agreement outlines the legal rights and obligations of both the buyer and the seller of the shares. Among the important details included in a share sale agreement are the amount and price of shares being sold, the transfer of ownership, payment methods, warranties and more.
A share sale agreement can be used if a shareholder wants to sell all or a select number of shares. If all shares are sold then the seller will typically agree in the contract to cease being a shareholder of the company.
Where to find legal templates like a share sale agreement
Websites such as Lawpath and LegalVision offer a range of services and templates that allow you to create legal documents with ease. The following websites specifically offer share sale agreement templates:
- LawDepot. Create a free custom share sale agreement by answering a few simple questions. You can then download and use your agreement.
- Net Lawman. Purchase a customisable share sale agreement template for $119. Alternatively, you can get the document, plus a professional review for $394.
- Sprintlaw. Sprintlaw offers a fixed-fee share sale agreement package for $1375 + GST. The comprehensive package includes phone consultations, an agreement tailored to your needs, along with complementary amendments to the final document.
- Documatica Legal Forms. Build a custom share sale agreement, and download it, for US$24.95.
- The Contract Company. Receive a free consultation with The Contract Company. Afterwards, you can receive a custom share and sale agreement.
You can also find more business documents and templates via links in the following table:
Does your company belong in this list?
What clauses does a share sale agreement include?
The clauses in a share sale agreement can differ, depending on the business and the situation. The following clauses are usually included in this agreement:
- Parties involved in the sale agreement. This section should include details on who is involved in the buying and selling of the shares and which companies they belong to.
- Amount and type of shares. One of the most important sections to include in the share sale agreement is the actual amount of shares; this will greatly affect the pricing and the size of the deal. It's also important to include the types of shares being sold, as not all shares are the same.
- Price and payment schedules. A share sale agreement should include the price of the shares being sold and when the payments should be made.
- Transfer of ownership. Details on the transfer of ownership should always be included in a share sale agreement as this is not always carried out straight away and will require a separate document.
- Warranties. The seller and purchasers usually offer warranties. For example, the seller may assure that the company records are in good shape and that there are no legal actions that could affect the agreement.
- Governing law. Some online templates aren't made specifically for Australian businesses and therefore could risk the agreement being invalid. Include a clause that explains that the agreement adheres to Australian national and territory law.
Once again, if you're unsure whether your share sale agreement includes everything it needs to, then take advantage of online legal services. Find a legal professional to review your documents at an affordable rate on websites such as Sprintlaw and Lawpath.
Do I need to use a lawyer?
It's not a legal requirement to have a lawyer draft a share sale agreement. You can create this document using one of the templates listed above.
That being said, having a lawyer review the agreement can ensure it covers everything it needs to. Getting a lawyer to edit and revise your share sale agreement will also bring you more peace of mind.
Share sale agreement vs share subscription agreement
A share sale agreement and a share subscription agreement are both legal contracts that outline the terms and conditions of the selling of shares. However, these two documents should not be confused.
- A share sale agreement is a document for the sale of shares by a shareholder, at an agreed price.
- A share subscription agreement is a document drawn up by a company to sell shares to investors, at an agreed price.
The difference between these agreements is that a share subscription agreement deals with a company selling shares to investors. However, a share sale agreement is where a shareholder of the company sells already existing shares.
Frequently asked questions
When should I use a share sale agreement?
A share sale agreement should be used whenever you are buying or selling shares in a private company or business. No matter how many shares you are selling, a share sale agreement should always be used.
The agreement ensures that your interests are covered, and everything is set out in clear and legally binding clarity. If you do not write out a share sale agreement before you engage in buying and selling company shares, you can leave yourself open to financial ruin, fraud and general business obscurity.
How effective is a share sale agreement?
A share sale agreement is very effective in various ways. For example, the document ensures both the seller and the buyer agree with the terms and conditions of the shares.
The agreement acts as a contractual agreement between the buyer and seller. A share sale agreement is also effective in protecting your business in any liable cases.
What is the procedure for a transfer of shares?
The procedure for a transfer of shares starts with valuing the shares. Next, the shares are offered to other shareholders or third-party investors. Finally, the correct agreements and legal documents are drafted and signed and the shares transfer ownership. A transfer of shares requires several documents, including a share sale agreement, share transfer form and a shareholders agreement.Back to top
Ask an Expert