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Share Sell Agreement Template for Philippines

A Share Sale Agreement under Philippine law is a legally binding contract that documents the transfer of ownership of shares from a seller to a buyer in a Philippine corporation. The agreement must comply with the Corporation Code of the Philippines, Securities Regulation Code, and relevant tax laws. It details the terms and conditions of the share transfer, including purchase price, payment terms, warranties, representations, and closing conditions. The document incorporates specific requirements under Philippine law, such as foreign ownership restrictions where applicable, and necessary corporate approvals.

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What is a Share Sell Agreement?

The Share Sale Agreement is a crucial document used in Philippine corporate transactions when transferring ownership of shares in a corporation. It serves as the primary contract governing the terms and conditions under which shares are sold from one party to another, whether in whole or in part. This document is essential for both private and public companies operating under Philippine jurisdiction and must comply with various regulations including the Corporation Code, Securities Regulation Code, and tax laws. The agreement typically includes detailed provisions on share valuation, payment terms, representations and warranties, conditions precedent, and completion mechanics. It's particularly important for documenting compliance with Philippine foreign ownership restrictions when applicable, and ensuring proper corporate governance in share transfer transactions.

What sections should be included in a Share Sell Agreement?

1. Parties: Identification of the Seller(s) and Buyer(s) with complete details as required under Philippine law

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

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including number of shares, price, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before completion of the sale

6. Completion: Details of when, where, and how the transfer will be completed

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

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

9. Covenants: Pre and post-completion obligations of both parties

10. Tax Matters: Provisions regarding tax liabilities and responsibilities

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process for sending formal notices between parties

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

14. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

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

1. Non-Competition: Restrictions on seller's future business activities - include when seller has operational knowledge of the business

2. Employee Matters: Provisions regarding key employees - include when share sale affects employment arrangements

3. Intellectual Property: Special provisions for IP rights - include when company owns significant IP assets

4. Foreign Ownership Compliance: Special provisions ensuring compliance with Philippine foreign ownership restrictions - include when buyer is foreign

5. Earn-out Provisions: Structure for additional payments based on future performance - include when price includes performance-based components

6. Break Fee: Compensation if deal fails - include in high-value or complex transactions

7. Director Resignations: Provisions for change in board composition - include when sale results in management changes

What schedules should be included in a Share Sell Agreement?

1. Share Details: Details of shares being sold including share certificates numbers and class of shares

2. Company Information: Key details about the company including corporate documents and registrations

3. Warranties: Detailed warranties and representations by the seller about the company and shares

4. Disclosure Letter: Seller's disclosures against the warranties

5. Completion Requirements: Detailed list of documents and actions required for completion

6. Existing Encumbrances: List of any existing liens or encumbrances on the shares

7. Corporate Approvals: Copies of required corporate approvals and resolutions

8. Financial Statements: Recent financial statements of the company

Authors

Alex Denne

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

Jurisdiction

Philippines

Publisher

黑料视频

Document Type

Stock Agreement

Cost

Free to use

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