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Share Acquisition Agreement Template for Hong Kong

A comprehensive legal agreement governed by Hong Kong law that documents the terms and conditions for the purchase and sale of shares in a company. The agreement details the purchase price, payment terms, conditions precedent, warranties, indemnities, and completion mechanics. It incorporates Hong Kong-specific requirements including compliance with the Companies Ordinance, Stamp Duty Ordinance, and other relevant Hong Kong legislation. The document provides a legally binding framework for transferring ownership while protecting both buyer's and seller's interests through carefully structured representations, warranties, and covenants.

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What is a Share Acquisition Agreement?

The Share Acquisition Agreement is a fundamental document in corporate transactions under Hong Kong law, used when one party wishes to acquire ownership of a company through the purchase of its shares from existing shareholders. This agreement is essential for both private and public company transactions, though its specific terms may vary depending on the size and complexity of the deal. The document must comply with Hong Kong's legal framework, particularly the Companies Ordinance (Cap. 622) and Stamp Duty Ordinance (Cap. 117). It typically includes detailed provisions on purchase price mechanics, conditions precedent, warranties about the target company's business, indemnification provisions, and completion procedures. The agreement is particularly important in Hong Kong's dynamic business environment, where cross-border transactions are common and regulatory compliance is strictly enforced.

What sections should be included in a Share Acquisition Agreement?

1. Parties: Identification of the seller(s), buyer(s) and the target company

2. Background: Context of the transaction and brief description of the target company

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

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

5. Conditions Precedent: Conditions that must be satisfied before completion

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

7. Completion: Mechanics and requirements for closing the transaction

8. Warranties: Seller's warranties about the shares and target company

9. Limitations on Seller's Liability: Limitations on warranty claims and general liability

10. Buyer's Warranties: Basic warranties from the buyer

11. Confidentiality and Announcements: Provisions regarding transaction confidentiality and public announcements

12. Further Assurance: Obligations to take further actions necessary to effect the transaction

13. Notices: Process for formal communications between parties

14. General Provisions: Standard boilerplate provisions including governing law, jurisdiction, etc.

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

1. Tax Covenant: Specific tax indemnities - include when tax matters are material or complex

2. Non-Competition: Restrictions on seller's competing activities - include when seller could compete

3. Earn-out Provisions: Additional payment mechanisms based on future performance - include if price includes contingent payments

4. Management Arrangements: Terms for ongoing management - include if key managers are sellers

5. Transitional Services: Post-completion service arrangements - include if seller provides critical services

6. Break Fee: Fee payable if transaction fails - include for complex or high-risk transactions

What schedules should be included in a Share Acquisition Agreement?

1. Target Company Details: Corporate information about the target company

2. Warranties: Detailed seller's warranties about the business

3. Properties: Details of company's real estate assets

4. Intellectual Property: List of IP rights and registrations

5. Material Contracts: Summary of key commercial agreements

6. Employees: Key employment terms and arrangements

7. Completion Requirements: Detailed list of completion deliverables

8. Form of Resignation Letters: Template resignation letters for outgoing directors

9. Form of Board Resolutions: Template board resolutions for completion

10. Disclosure Letter: Specific disclosures against warranties

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

Hong Kong

Publisher

Ƶ

Cost

Free to use

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