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Share Sale Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that documents the terms and conditions for the sale and purchase of shares in a company. The agreement sets out the detailed mechanics of the transaction, including the purchase price, payment terms, warranties, and completion requirements. It ensures compliance with Nigerian corporate law, particularly the Companies and Allied Matters Act (CAMA) 2020, and includes provisions for share transfer documentation, stamp duty requirements, and necessary regulatory approvals. The document serves as the primary contract governing the transfer of ownership and protecting both parties' interests through detailed warranties and representations.

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What is a Share Sale Agreement?

A Share Sale Agreement is a crucial legal document used when transferring ownership of shares in a Nigerian company from one party to another. This agreement is essential for both private and public company transactions, though additional regulatory requirements apply for public companies. The document must comply with Nigerian legislation, particularly the Companies and Allied Matters Act (CAMA) 2020 and relevant securities laws. It typically includes comprehensive details about the transaction structure, payment terms, warranties, and representations, while also addressing tax implications and regulatory requirements. The agreement is commonly used in various scenarios including corporate restructuring, business exits, investment transactions, and succession planning. It provides legal protection for both parties and ensures a clear framework for the transfer of share ownership.

What sections should be included in a Share Sale Agreement?

1. Parties: Identification of the seller(s) and buyer(s) with full legal names and addresses

2. Background: Context of the transaction, including brief description of the company whose shares are being sold

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and interpretation rules

4. Sale and Purchase: Core terms of the sale including number of shares, class of shares, and agreement to sell and purchase

5. Purchase Price: Details of the consideration, payment method, and timing

6. Completion: Timing and mechanics of completion, including actions required at completion

7. Seller's Warranties: Warranties regarding title to shares, capacity to sell, and company-related warranties

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

9. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business

10. Confidentiality: Obligations regarding confidential information and announcements

11. Tax Matters: Tax-related provisions, including responsibility for capital gains tax and stamp duty

12. Notices: Process for giving formal notices under the agreement

13. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

What sections are optional to include in a Share Sale Agreement?

1. Conditions Precedent: Used when completion is conditional on certain events or approvals, such as regulatory clearance

2. Deferred Consideration: Include when part of the purchase price is to be paid later or is contingent

3. Non-Competition: Required when the seller needs to be restricted from competing post-completion

4. Seller Financing: Include when the seller is providing financing for part of the purchase price

5. Foreign Investment Provisions: Required when there are foreign investors involved

6. Tag-Along/Drag-Along Rights: Include for partial share sales where ongoing shareholder relationships need to be regulated

7. Break Fee: Used when parties want to specify compensation for failed completion

8. Post-Completion Adjustments: Include when purchase price may be adjusted based on completion accounts

What schedules should be included in a Share Sale Agreement?

1. Details of the Company: Complete corporate information including registration number, registered office, directors, etc.

2. Details of the Sale Shares: Specific details of shares being sold including share certificate numbers and class rights

3. Warranties: Detailed warranties about the company, its business and assets

4. Completion Requirements: Detailed list of documents and actions required at completion

5. Encumbrances: List of any existing charges or encumbrances on the shares

6. Company Accounts: Latest financial statements and management accounts

7. Intellectual Property: Schedule of company's IP rights if material to the transaction

8. Material Contracts: List and details of important company contracts

Authors

Alex Denne

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

Jurisdiction

Nigeria

Publisher

Genie AI

Cost

Free to use

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