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Common Stock Purchase Agreement for Australia

Common Stock Purchase Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that facilitates the sale and purchase of common stock (ordinary shares) in an Australian company. This document outlines the terms and conditions of the share transfer, including purchase price, payment terms, representations and warranties, and completion requirements. It ensures compliance with the Corporations Act 2001 (Cth) and other relevant Australian legislation, while protecting the interests of both the seller and purchaser through detailed provisions covering share transfer mechanics, conditions precedent, and post-completion obligations.

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What is a Common Stock Purchase Agreement?

The Common Stock Purchase Agreement is a crucial document used in Australian corporate transactions when transferring ownership of ordinary shares in a company. It is particularly relevant for private company share sales, startup investments, and corporate restructuring. The agreement must comply with Australian corporate law, particularly the Corporations Act 2001 (Cth), and includes essential elements such as share details, purchase price, warranties, and completion mechanics. This document is commonly used in both simple and complex share transactions, from small private company transfers to larger corporate deals, and can be adapted to include additional provisions for specific requirements such as foreign investment approval or escrow arrangements. The agreement serves as the primary document evidencing the terms of the share transfer and protecting both parties' interests through clear documentation of their rights and obligations.

What sections should be included in a Common Stock Purchase Agreement?

1. Parties: Identification of the seller(s) and purchaser(s) of the common stock

2. Background: Context of the transaction, including company details and purpose of the agreement

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

4. Sale and Purchase: Core transaction terms including number of shares, price per share, and total consideration

5. Purchase Price and Payment: Payment terms, method, and timing of payment

6. Conditions Precedent: Conditions that must be satisfied before completion occurs

7. Completion: Timing, location, and requirements for closing the transaction

8. Seller's Representations and Warranties: Statements of fact and assurances from the seller about the shares and company

9. Purchaser's Representations and Warranties: Statements of fact and assurances from the purchaser about their capacity and authority

10. Confidentiality: Obligations regarding confidential information

11. Announcements: Requirements for public announcements about the transaction

12. Costs and Stamp Duty: Allocation of transaction costs and stamp duty obligations

13. Notices: Process for formal communications between parties

14. General Provisions: Standard boilerplate provisions including governing law, jurisdiction, and entire agreement

What sections are optional to include in a Common Stock Purchase Agreement?

1. Tag-Along Rights: Optional section when minority shareholders need protection to sell their shares alongside majority shareholders

2. Drag-Along Rights: Optional section when majority shareholders need the right to force minority shareholders to join in the sale

3. Foreign Investment Provisions: Required when purchaser is a foreign entity requiring FIRB approval

4. Escrow Arrangements: Used when part of the purchase price is held in escrow

5. Employee Matters: Required when the sale affects employee share schemes or key personnel arrangements

6. Tax Indemnity: Detailed tax provisions when specific tax risks need to be allocated

7. Break Fee: Used in larger transactions where compensation is required if the deal fails

8. Anti-dilution Provisions: Protection against future share issuances that might dilute the purchased shares

What schedules should be included in a Common Stock Purchase Agreement?

1. Schedule 1 - Share Details: Details of the shares being sold including class, rights, and current ownership

2. Schedule 2 - Company Details: Key information about the company including corporate structure and capital

3. Schedule 3 - Warranties: Detailed list of warranties given by the seller

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

5. Schedule 5 - Encumbrances: List of any existing encumbrances on the shares

6. Schedule 6 - Corporate Documents: List of key corporate documents including constitution and shareholders agreements

7. Appendix A - Share Transfer Form: Standard form for executing the share transfer

8. Appendix B - Board Resolution: Pro-forma board resolution approving the share transfer

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions






















































Clauses












































Relevant Industries

Financial Services

Technology

Manufacturing

Real Estate

Healthcare

Mining and Resources

Retail

Professional Services

Agriculture

Energy

Telecommunications

Education

Transport and Logistics

Construction

Media and Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Investment

Compliance

Risk Management

Corporate Secretariat

Executive Leadership

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Lawyer

Company Secretary

Investment Manager

Director of Corporate Development

Merger & Acquisition Manager

Financial Controller

Business Development Director

Corporate Finance Manager

Investment Banker

Private Equity Manager

Venture Capital Associate

Risk Management Officer

Compliance Officer

Board Director

Managing Director

Industries








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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