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If you are purchasing (or selling) a business, it is critical that you conclude a written agreement. This agreement ticks the boxes and also includes a restraint of trade in terms whereof the seller of the shares undertakes to not compete with the Company.
R495
One of the mechanisms for acquiring shares can be by way of subscribing for shares in a company. It is important that the company’s authorised share capital is sufficient and also that the requirements of the company’s Memorandum of Incorporation are complied with.
This agreement regulates the purchase and sale of shares in a company. It regulates important matters like the purchase price, payment details, transfer mechanisms, confidentiality, dispute resolution. If the seller remains a shareholder in the company, or if there is more than one shareholder in the company after the transaction, please remember that it is critical to also conclude a proper shareholders agreement (which should also be supported by a new Memorandum of Incorporation).
When appointing a non-executive director – it is strongly recommended that a written contract is put in place. This ensures that the non-executive director’s obligations are outlined, that the termination provisions are clear and that the remuneration is properly documented.
