Shares sale agreement

Simple transaction
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Document overview

This agreement is for the sale of shares in a private company in any industry for cash. It includes a less extensive selection of warranties than other similar agreements we offer, making it suitable for transactions where the risks to the buyer are lower: such as when the buyer is familiar with the company, or when the seller is trusted.
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About this shares sale agreement

This document is for use by a buyer of shares in a private limited company in circumstances where he or she does not require the full protection of detailed warranties.

Whether transfer of control of a company takes place by a transfer of all the shares, or less than all of them, the buyer knows far less than the sellers about the company. So most of the substance of a sale agreement consists in warranties. Of those warranties, those relating to real property - land and buildings - are likely to be most important.

However, sometimes buyers do not need to rely on detailed warranties. This document is drawn for such an occasion.

Examples when this document might be used include when:

  • shares change hands within the existing body of shareholders and directors, such as on a management buy-in by a director, or on sale by one shareholder

  • you are buying from a close friend or relative whom you trust absolutely, and you may not think it appropriate to tie that person down to the extent of a massive slate of detailed warranties

  • the risk of overstatement or understatement of assets or liabilities is low

  • the company is being sold to another company in the same group in a reorganisation of group structure


A warranty is a promise that something is as it is described, and which, if untrue, can allow the side relying on that information to seek compensation.

Warranties are used primarily because they protect the buyer, who does not have the same information as the seller about the company. However, when the risks are lower: such as when buyer knows the company or trusts the seller, warranties are less useful.

In this agreement we provide warranties as to title, general background, accounts, cash flow, taxation, and assets. You can choose whether you want each to be given or not. Sellers will, obviously, want to limit the warranties given.

The law in this agreement

The framework of the deal is the 2006 Companies Act. Within that framework, there are no special requirements as to what your deal should be.

Similar documents

This agreement is for the situation where the buyer purchases the shares of an existing shareholder.

If you require extensive warranties, our longer agreement contains these.

Sometimes, you may want to change relative ownership proportions at the same time as the sale by subscribing to newly issued shares. For example, you may buy the shares of a departing shareholder and then invest additional equity to obtain a majority shareholding. In that case, you will need a document that deals with both the purchase and the new issue.

Alternatively, you may be just want to invest alongside existing shareholders. In that situation, you need a subscription agreement. We also sell a simpler version for uncomplicated transactions that don’t require the warranties that the other documents have.

You may also need other documents.

Whether you are the incoming shareholder, or one that will remain post-purchase, a shareholders' agreement should be used to set out how decisions will be made under the new ownership structure. Net Lawman offers a number of agreements between shareholders in a UK company that complement this document,

You may need minutes and notices to approve changes the company makes soon after purchase.

Lastly, the new shareholder carry enough voting power to change the directors. In which case, the new directors will need service agreements.


  • Definitions
  • Interpretation
  • Agreement for sale
  • Completion and delivery of documents
  • Warranties applicability and limitation
  • Warranties by selling shareholders
  • Restrictive agreement
  • Selling shareholder’s protection
  • Miscellaneous matters
  • Schedule 1: Company data and shareholdings
  • Schedule 2: Warranties
Sample shares sale agreementSample page from the simple shares buy-sell agreement

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Recent reviews

27 October 2019
Chris McCormick
Review of the New Zealand version
Pleasantly Reassured
29 August 2019
It was just easy to figure out what document I needed & the whole payment process & download option was seamless. I did have my doubts initially about using an internet service like yourself as you are an overseas company, but the ability to pay by paypal made it way more trustworthy.
Kris Vermeir
Review of the New Zealand version
23 July 2018
Ninorta Gabriel
Review of the Australian version
Read all 13 reviews

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