Document background
The Buy-Sell Agreement (Cross Purchase) is a crucial document for Malaysian businesses with multiple shareholders, providing a predetermined framework for ownership transitions. This agreement becomes essential when shareholders need to plan for future contingencies such as death, disability, retirement, or voluntary exit of a shareholder. It differs from other buy-sell arrangements as it specifically structures the purchase to occur directly between shareholders, rather than involving the company as a purchaser. The agreement helps prevent potential disputes and ensures business continuity by establishing clear procedures for share transfers, valuation methods, and payment terms. It must comply with Malaysian legal requirements, including the Companies Act 2016, Contracts Act 1950, and relevant tax regulations. The document is particularly valuable for family businesses, professional practices, and closely-held companies where maintaining control over ownership is crucial.
