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Stock Purchase Agreement Template for Australia

A Stock Purchase Agreement under Australian law is a legally binding contract that facilitates the sale and purchase of shares in a company. This comprehensive document outlines the terms and conditions of the share transfer, including purchase price, payment terms, warranties, representations, and conditions precedent. It incorporates provisions compliant with the Australian Corporations Act 2001 and other relevant legislation, addressing matters such as FIRB approval requirements, ASIC notifications, and state-specific stamp duty obligations. The agreement typically includes detailed schedules covering company information, warranties, and completion requirements.

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What is a Stock Purchase Agreement?

The Stock Purchase Agreement is a fundamental transaction document used in Australian business acquisitions where shares in a company are being transferred from one party to another. This agreement is essential when acquiring or disposing of ownership in a company through a share sale, whether for a complete or partial acquisition. It addresses crucial elements including purchase price mechanics, completion procedures, warranties and indemnities, and post-completion obligations. The document must comply with Australian corporate law requirements, including those under the Corporations Act 2001, and may need to address foreign investment approvals, competition law considerations, and state-specific stamp duty obligations. It's particularly important in private company transactions and requires careful consideration of tax implications, regulatory compliance, and risk allocation between parties.

What sections should be included in a Stock Purchase Agreement?

1. Parties: Identifies and provides full details of the seller(s) and purchaser(s)

2. Background: Recitals explaining the context of the transaction and basic information about the target company

3. Definitions and Interpretation: Comprehensive list of defined terms and interpretation rules for the agreement

4. Sale and Purchase: Core transaction terms including the shares being sold and purchase price

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

6. Conditions Precedent: Conditions that must be satisfied before completion can occur

7. Pre-Completion Obligations: Obligations of both parties between signing and completion

8. Completion: Process and requirements for closing the transaction

9. Warranties and Representations: Seller's warranties about the company, shares, and business

10. Limitations on Claims: Restrictions on warranty claims including time limits and financial caps

11. Confidentiality: Obligations regarding confidential information

12. Announcements: Requirements for public statements about the transaction

13. Tax Matters: Tax-related obligations, indemnities, and arrangements

14. Further Assurance: Obligations to take additional steps to give effect to the agreement

15. Notices: Process and requirements for formal communications

16. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

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

1. Earn-out Provisions: Used when part of the purchase price is contingent on future performance

2. Non-Competition and Non-Solicitation: Required when restricting seller's future business activities

3. Security for Claims: Include when purchase price is held in escrow or other security is provided

4. Employee Matters: Necessary when specific arrangements are needed for key employees

5. Intellectual Property Rights: Important when IP is a significant asset of the target company

6. Environmental Matters: Required for companies with significant environmental risks or obligations

7. Break Fee: Include when parties agree to compensation if the deal fails under specific circumstances

8. Foreign Investment Approval: Required when foreign investment approval is needed

9. Transitional Services: Include when seller will provide services post-completion

What schedules should be included in a Stock Purchase Agreement?

1. Details of the Company: Corporate information, share capital structure, and subsidiaries

2. Warranties: Detailed list of seller's warranties about the company and business

3. Disclosed Documents: List of due diligence documents and disclosure materials

4. Properties: Details of real property owned or leased by the company

5. Material Contracts: List and details of key business contracts

6. Intellectual Property: Schedule of IP rights owned or licensed by the company

7. Employee Information: Details of employees, employment terms, and benefits

8. Completion Requirements: Detailed list of documents and actions required at completion

9. Form of Resignation Letters: Template letters for retiring directors/officers

10. Working Capital Statement: Agreed form of working capital calculation

11. Permitted Leakage: List of permitted payments between signing and completion

Authors

Alex Denne

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

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use

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