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C131 - Chinese Agreement of Sale & Purchase of Shares in a Limited Company

Description and usage

Chinese Agreement of Sale & Purchase of Shares in a Limited Company

This document is in two versions - English and Chinese. It is suitable for use where both Seller and Buyer are the only Shareholders in a Company and the effect of the sale will be to transfer control of the Company to Buyer. It is much shorter than many such agreements because of the relationship of the parties, both of them being shareholders and represented on the board of the company. There are very few warranties in this form. The contract details the number and shares to be sold, price, actions on completion - payment and resignation of directors and the cancellation of a shareholders' agreement ,if this exists.

What's in it? - Read explanatory notes

 

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Chinese Agreement of Sale & Purchase of Shares in a Limited Company

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You will find this contract in:

Chinese Contracts
Full Catalogue

 

You could also consider these related contracts:

A131Agreement for Sale & Purchase of Shares in a Limited Company
C107Chinese Shareholders Agreement Template
C119Chinese Confidentiality Undertaking
C126Chinese Licence for Manufacture & Sale
Z142Checklist for Contents of Shareholders' Agreement - Free Document
Z157Doing Business in China - A few tips for the first timer

What's in it?

Whilst for obvious reasons we can't show you the actual item before you purchase it, we can do the next best thing. We show you the explanatory notes that go with each contract and, in the case of books and forms, a brief summary. These will give you a good idea of the content of the document before you buy it. 

Explanatory Notes

Chinese Agreement of Sale & Purchase of Shares in a Limited Company

This agreement is designed for use where the two parties are the only shareholders in a company and one of them wishes to sell its holding to the other. In such circumstances where, as our agreement contemplates, both parties are represented on the board of the company and both of them are parties to a shareholders' agreement, very little formality is required: both of them should already know about the company's business without the buyer having to rely on 'due diligence'.

The main concern from the Buyer's point of view is to ensure that the shares which he is acquiring are beneficially owned by the Seller and that no third party has any undisclosed interest in those shares. The Buyer will also want to be sure that the sale is only completed when the Seller's directors resign from the board.

Turning to the specific clauses:

1. SALE & PURCHASE OF SHARES

This sets out the transaction and refers to a schedule which specifies the number of shares being transferred.

2. PRICE

This contains the price payable by Buyer to Seller and makes it clear that payment will be due on completion.

3. WARRANTIES

This deals with the point made above: the Seller warrants to the Buyer that he is the beneficial owner of the shares and that the same situation will apply at completion. In the interim period, Clause 3.3 makes it clear that the Seller will not do anything to prejudice the business of the Company.

4. COMPLETION

This deals with the mechanics of the transaction - when the shares will be transferred and resignation letters from Seller's nominated directors will be handed over. Payment will also be made for the shares at this point (4.2).

5. SHAREHOLDERS' AGREEMENT

If the Buyer and Seller are the two parties to a Shareholder's Agreement, this clause will be applicable and the effect will be for the Shareholders' Agreement to be terminated on completion.

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