Share Transfer Agreement Template

Use a Share Transfer Agreement (STA) when existing ownership of a company or business is changing hands. With this formal contract, both parties can define price, number/class of shares, reps and warranties, consents, conditions precedent, and closing mechanics.

This share transfer agreement template was designed with actual transactions in mind. It’s practical because:

• Covers both private and public company share transfers. Transfers of multi-class shares involving more than one company are also covered.
• Applicable to both individual transferors and transferees (natural persons) and companies. Simply change the identification of the parties accordingly.
• Can be used for both paid transfers and share transfers as gifts. If the shares are being transferred as a gift, the form guides you to include a nominal consideration amount to meet the requirements of contract law.
• Can be used on its own or with a standard stock transfer form when special terms need to be met.

Download this share transfer agreement template in PDF or Word. Edit before signing to define ownership transfer, payment terms, and shareholder rights clearly.

Who It's For

The parties who can use this share transfer agreement template include:

• Founders transferring shares of their company to other founders, early employees, or new investors
• Private shareholders selling or transferring shares of a private limited company or a closely held corporation
• Investors or purchasers taking ownership of shares in a family business or sole proprietorship
• Secretaries and business lawyers documenting equity transfers and maintaining company records
• Buyers and sellers who have a transaction that’s too complex for a stock transfer slip, such as those involving special conditions, multiple classes of stock, or warranty clauses.

What's Included in the Sample Share Transfer Agreement

The following share transfer agreement template contains the essential terms for an effective transfer:

• Transfer of shares: This clause confirms that title to the shares is transferred absolutely, along with all rights to receive dividends (even those unpaid), capital, and voting rights. The transfer will take effect on execution and payment.
• Transfer price: Details the consideration agreed upon for the transfer; includes a note on how to word transfers made at a nominal price (as gifts).
• Cost of transfer: States that will bear the share registration cost/certificate fees (assumed to be the transferee, but can be changed).
• Effect of lack of formality: In the event that the transfer fails to register or if the directors refuse to register the transfer, the parties automatically receive a trust over the shares in favor of the intended transferee.
• Warranties and indemnities: The transferor warrants that they have full legal title to the shares and that there are no encumbrances or third-party rights attached to them. The parties also warrant that they have the authority to enter into the agreement.
• Governing law and jurisdiction: Includes an appropriate law and jurisdiction clause.
• Schedule A: Include details of the shares being transferred, i.e., class, number of shares, and company name.

How to Write Your Share Transfer Agreement

The template covers the heavy lifting, but a few choices are left to you before execution.

Correctly identify the parties

The default party clause assumes that both parties are corporations. If either the transferor or transferee is an individual, modify the identification clause to specify the full name, ID document type and number, and residential address of the party.

Failure to correctly identify parties can lead to enforcement issues down the road.

Choose the transfer price intentionally

If transferring shares as a gift, don’t leave the price blank. Most jurisdictions require some minimal level of consideration for a contract to be enforceable. The template recommends $10.

If shares are being sold, agree on a fair market value or price as may have been set out in a shareholder's agreement.

Agree on who pays the registration fees

The template assigns this responsibility to the transferee. That’s typically appropriate where the transferee is receiving the asset and has the greatest interest in seeing registration effected. However, if the transferor is driving the transaction (i.e., in a buyout or company restructure), this may be something to negotiate.

Read the lack of formality clause before relying on it

Clause 4 creates a trust for the benefit of the transferee if registration isn’t formally effected (i.e., if the company's directors refuse to register the transfer). While this provides a useful safety net, it doesn’t replace the actual registration of the shares.

If you intend to rely on this clause as a safety net, consider amending the agreement to include a time-bound obligation on the transferor to make reasonable efforts to register the transfer.

Review the warranty against encumbrances

Under clause 5.1, the transferor warrants that the shares are free from any encumbrances. If there’s a shareholders' agreement with rights of first refusal, tag-along rights, or pre-emption rights, those rights may, for these purposes, constitute existing obligations on the shares.

Cross clause 5.3 against any shareholders' agreement before signing this agreement.

Fill out Schedule A carefully

It’s where the shares being transferred are specifically identified. Be sure to specify the share class (ordinary, preference, etc), number of shares, nominal value per share, and the full legal name of the company. Ambiguities in Schedule A are a common source of dispute. If transferring shares in more than one company, repeat Schedule A for each company, including the details for each.

Documents Often Used Alongside a Share Transfer Agreement

• Non-Disclosure Agreement (NDA): During a share sale, an NDA can help you protect the financials, the cap tables and the diligence materials to allow free discussion without disclosure of confidential information․
• Business Contract: If the share transfer will be accompanied by an active service or supply arrangement, the STA may be paired with a business contract to establish the terms of post-closing arrangements․
• Investment Contract: For new money flow, use the investment contract to set the valuation, rights and protections of the new investors, and use the STA to actually effect the transfer of old shares․
• 50/50 LLC Operating Agreement: If ownership becomes equal, adopt or update an operating agreement specifying governance, decision-making, profit-sharing, and deadlock-breaking mechanisms․
• Memorandum of Agreement (MOA): It’s helpful early on to align stakeholders, outline diligence responsibilities, and set a path to the definitive Share Transfer Agreement.