Share Sale Agreement (Long Form)
A Share Purchase Agreement is a document that outlines the terms of sale shares owned by a company’s shareholder, to another party.
4.0 (24 reviews)
Last updated February 3, 2025
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
This document applies in cases where the shares have already been issued, and are already owned by a person or company; this document is not appropriate in cases where new shares will be issued to a buyer. This document supports sales by up to two existing shareholders, although more may be manually added as necessary. This document also requires shareholders who aren’t parties to the sale to sign the agreement as providers of warranties that address the company’s operations and financial health.
Please note that this document references a "Disclosure Letter". We have provided a template Disclosure Letter as Appendix 1. We highly advise that you seek professional advice from a lawyer and/or accountant in assembling your letter. These letters must address each of the warranties mentioned in this Agreement and supporting documentation must be provided, and there may be matters that require disclosure as stipulated by the Corporations Act 2001 and ASIC guidance.
This document also requires that a guarantor be part of the agreement to ensure that the selling parties perform their obligations under this agreement, including but not limited to transferring the shares to the buyer, and compensating the buyer in case of certain issues with the company’s health within a certain period following the sale.
Use this Share Purchase Agreement if:
You are buying shares held by individuals in a company OR are an individual selling your shares in a company to a third party.
You want the sale to have certain terms and warranties that address the company’s health, and what should happen if the business deteriorates within a period after the purchase of shares.
You want the agreement to be secured by the participation of a guarantor.
The Share Purchase Agreement covers:
The terms of the sale, and the circumstances in which the shareholders selling shares will be liable to compensate the buyer for shortfalls in the business’s performance.
A comprehensive list of warranties provided by the sale shareholders, as well as continuing shareholders in regards to the company’s operation and health.
For more information:
The Legal Risk Score of a Share Sale Agreement (Long Form) Template
Our legal team have marked this document as medium risk considering:
- The warranties provided by the Sale Shareholder are extensive and detailed, which could expose the Sale Shareholder to significant liability if any information is inaccurately represented or undisclosed.
- The agreement does not limit the monetary value or time frame of the warranties, potentially leading to prolonged and costly liabilities for the Sale Shareholder beyond the usual business risks.
- The share transfer must be properly executed, which requires administrative work from both parties and the company.
Users familiar with share sale agreements may find the document's structure and terms standard, but should be cautious of the potential long-term liabilities and the depth of due diligence required.
Share Sale Agreement (Long Form) Checklist
Complete your free Share Sale Agreement (Long Form) with our checklist
Complete Payment and Transfer Forms
Arrange for the payment of the Purchase Price by the Buyer and ensure that the Sale Shareholder delivers signed share transfer forms to the Buyer.
Carry out Share Transfer
The share transfer should be effected with the aid of a company secretary or lawyer.
Monitor Warranty Compliance
Regularly review and monitor the compliance with the warranties provided in the agreement to manage potential future claims or disputes.
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