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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. This particular agreement includes a restraint of trade in terms whereof the seller of the shares undertakes to not compete with the Company.. 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).
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A shareholders agreement is fundamentally important to your business. There are numerous issues that can arise that can give rise to serious disputes between shareholders and more often than not, shareholder disputes can jeopardise the entire business. It is also vital that a shareholders agreement is concluded in conjuction with the Memorandum of Incorporation for the Company, particularly as the Companies Act 2008 provides that in relation to certain vital aspects a Memorandum of Incorporation will override and take precedence over a shareholders agreement.
If you are purchasing or selling an interest in a close corporation, then this is the correct document for you. Much like the purchase and sale of shares in a company, these can be complex transactions that are often prone to disputes. A written agreement regulating matters like the purchase price, payment details, confidentiality, dispute resolution, etc is critical.
If a third party stands in for the debt of (for example) a company, then that constitute a suretyship. If the suretyship undertaking is supported by a pledge of shares, then this is the correct document for you. Importantly, the pledge must be accompanied by the pledgee actually holding the share certificate.
