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Share Buyout Agreement Template for England and Wales

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Key Requirements PROMPT example:

Share Buyout Agreement

"I need a Share Buyout Agreement for our tech company to repurchase 25% of shares from a departing founder, who will also be stepping down as CTO but needs to retain some IP rights and maintain confidentiality obligations."

Document background
A Share Buyout Agreement is essential when a company wishes to repurchase its own shares from existing shareholders. This document, governed by English and Welsh law, is commonly used in situations such as shareholder exits, corporate restructuring, or implementation of employee share schemes. The agreement must comply with the Companies Act 2006, particularly regarding capital maintenance rules and procedural requirements. It typically includes detailed provisions on valuation, payment terms, tax treatment, and any continuing obligations of the selling shareholders.
Suggested Sections

1. Parties: Details of the company and selling shareholders

2. Background: Context of the transaction and current shareholding structure

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase: Core terms of the share buyback including price and number of shares

5. Completion: Timing and mechanics of the transaction

6. Warranties: Basic warranties regarding share ownership and authority to sell

Optional Sections

1. Employee Matters: Provisions relating to termination of employment and related matters when seller is also an employee/director

2. Non-compete Provisions: Restrictions on seller's future activities when seller has significant company knowledge

3. Tax Indemnities: Specific tax-related protections for complex tax structures or high-value transactions

Suggested Schedules

1. Schedule 1 - Share Details: Details of shares being bought back including share certificates

2. Schedule 2 - Completion Requirements: List of documents and actions required at completion

3. Schedule 3 - Board Minutes: Pro-forma board resolutions approving the buyback

4. Schedule 4 - Tax Calculations: Detailed breakdown of tax treatment and calculations

Authors

Alex Denne

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

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Relevant Industries
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Industries

Companies Act 2006: Primary legislation governing share capital, buybacks (sections 658-737), shareholder approval requirements, financial assistance rules, and Companies House filing obligations

Financial Services and Markets Act 2000: Regulates financial promotions and contains specific requirements for listed shares

Companies (Share Capital and Debentures) Regulations 2008: Details corporate insolvency rules, solvency requirements, and distribution regulations for share buybacks

Income Tax Act 2007: Contains tax provisions relevant to share buybacks, particularly regarding income tax treatment

Corporation Tax Act 2010: Governs corporate tax implications of share buybacks and related transactions

Taxation of Chargeable Gains Act 1992: Covers capital gains tax implications and stamp duty considerations for share buybacks

Employment Rights Act 1996: Relevant when the selling shareholder is also an employee or director of the company

Articles of Association: Company's constitutional document that may contain specific provisions regarding share buybacks

Shareholders' Agreement: Existing agreement between shareholders that may contain provisions affecting share buybacks

Market Abuse Regulation: Applies to listed companies and regulates insider dealing and market manipulation in relation to share transactions

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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