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Shareholder Buyout Agreement Template for New Zealand

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Key Requirements PROMPT example:

Shareholder Buyout Agreement

"I need a Shareholder Buyout Agreement for my tech startup where two founding shareholders are selling their combined 30% stake to the company for NZD 2.5 million, with completion planned for March 2025; the selling shareholders will also be stepping down from their executive positions."

Document background
The Shareholder Buyout Agreement is a crucial document used when an existing shareholder wishes to exit a company by selling their shares to either the company itself or other shareholders. This agreement is particularly important in the New Zealand business context, where it must comply with the Companies Act 1993 and related legislation. It's commonly used in situations such as retirement of a founding member, resolution of shareholder disputes, or strategic restructuring of ownership. The document encompasses essential elements including share valuation, payment terms, warranties, tax implications, and completion mechanics. It may also address continuing obligations, non-compete provisions, and employee matters if the selling shareholder holds a position within the company. The agreement's structure ensures that the transaction is legally sound and protects all parties' interests while maintaining compliance with New Zealand corporate law requirements.
Suggested Sections

1. Parties: Identification of the selling shareholder(s), purchasing shareholder(s) or company, and the company whose shares are being transferred

2. Background: Context of the buyout, current shareholding structure, and reason for the transaction

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Sale and Purchase of Shares: Core transaction terms including number of shares, price, and basic mechanism of transfer

5. Purchase Price and Payment: Detailed payment terms, timing, and method of payment

6. Completion: Requirements and process for completing the share transfer, including timing and delivery of documents

7. Seller's Warranties: Warranties regarding share ownership, authority to sell, and company-related representations

8. Buyer's Warranties: Warranties regarding authority and capacity to purchase, and funding availability

9. Confidentiality: Obligations regarding confidential information and announcement of the transaction

10. Tax Matters: Tax-related obligations, indemnities, and arrangements

11. General Provisions: Standard boilerplate clauses including notices, governing law, and dispute resolution

Optional Sections

1. Staged Payments: Required when the purchase price is to be paid in installments, including payment schedule and security arrangements

2. Employee Matters: Needed when the selling shareholder is also an employee/director and arrangements for their departure need to be documented

3. Non-Compete Provisions: Used when restrictions on the seller's future business activities are required

4. Continuing Obligations: Required when the seller retains certain obligations or responsibilities post-completion

5. Third Party Consents: Needed when the transfer requires approval from other shareholders, the board, or external parties

6. Earn-out Provisions: Used when part of the purchase price is contingent on future performance

7. Shareholder Loans: Required when existing shareholder loans need to be addressed as part of the transaction

Suggested Schedules

1. Share Details: Details of shares being transferred including share numbers, classes, and certificates

2. Purchase Price Calculation: Detailed breakdown of how the purchase price was calculated

3. Completion Obligations: Checklist of documents and actions required for completion

4. Company Information: Key details about the company including assets, liabilities, and material contracts

5. Warranties: Detailed warranties and representations by the seller regarding the company and shares

6. Board Resolution: Copy of board resolution approving the share transfer (if required)

7. Share Transfer Forms: Pro-forma share transfer documents to be executed at completion

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Chief Executive Officer

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Company Secretary

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