Share Buyback Agreement
This Agreement can be used by a company to buy back shares from a particular shareholder.
4.5 (2 reviews)
Last updated January 30, 2025
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
This Share Buyback Agreement is a legal document between a shareholder and the company, under which the company agrees to repurchase a set number of shares from the shareholder at a predefined price. The agreement is designed to take place at a specified address and indicates that the company intends to cancel the repurchased shares and issue a new share certificate showing the remaining shares, if any, belonging to the shareholder.
WARNING: to effectively complete a share buyback process, many steps must be taken before and after signing this Agreement. If these are not taken, ASIC may invalidate the whole process. We highly recommend becoming familiar with section 257B of the Corporations Act 2001 (Cth) and seeking legal advice.
What does the Share Buyback Agreement cover?
- Procedure upon completion.
- Termination of shareholder rights.
- Relevant warranties.
- General terms such as governing law, assignment and notices.
The Legal Risk Score of a Share Buyback Agreement Template
Our legal team have marked this document as high risk considering:
- There is a possibility that the Shareholder might not have clear and unencumbered ownership of the shares, which could lead to legal complications after the transaction is completed.
- The document does not explicitly outline the consequences or remedies if either party fails to fulfill their obligations, leaving potential breaches of the agreement less manageable.
- If section 257B of the Corporations Act is not followed, it can create liability for the company.
Users familiar with share buyback processes may find this document suitable, but should remain cautious about the potential for unaddressed issues.
Share Buyback Agreement Checklist
Complete your free Share Buyback Agreement with our checklist
Delivery of Documents
The Shareholder must execute a Share transfer certificate and deliver it along with the share certificate to the Company at Completion.
Notice of Completion
Send a formal notice to each party at their respective addresses as specified in the Agreement or to any new address they have provided in accordance with the notice clause.
Cancellation and Reissue of Shares
Following Completion, the Company should cancel the share certificate representing the bought-back Shares and issue a new share certificate for any remaining shares to the Shareholder. Section 257B of the Cirporations Act
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