EXPLANATORY NOTES: AGREEMENT FOR THE SALE OF A MEMBER’S INTEREST AND CLAIMS ON LOAN ACCOUNT IN A CLOSE CORPORATION WHERE THE PURCHASER IS NOT A MEMBER AND WHERE THE CC OWNS A BUSINESS, BUT NO IMMOVABLE PROPERTY
This is a very detailed agreement that may be used where a member in a close corporation is selling his/her member’s interest and claims on loan account in a close corporation to a party who is not a member of the CC.
This agreement is for use solely where the CC owns a business. The agreement is drafted to cater for a situation where there are remaining members in the CC and also where there are no remaining current members. Detailed drafting notes assist with making the necessary changes. This agreement is for use where the CC owns an underlying business.
NOTE: this is an agreement for the sale of a member’s interest and claims only and NOT for the sale of a business. HOWEVER, as we assume that this agreement caters for a situation where the underlying CC owns a business, this agreement requires that the seller provide the purchaser with certain undertakings in respect of the business as well as the member’s interest and the claims on loan account.
This agreement is subject to suspensive conditions. Please pay attention to our extensive drafting notes in the agreement regarding suspensive conditions.
PLEASE NOTE this agreement must be used in conjunction either with the unilaterally-applicable confidentiality undertaking that the seller may require of the purchaser, or the bi-laterally applicable confidentiality agreement that both parties may require of each other; both of the latter legal documents are available on this site and their conclusion is a suspensive condition of the sale agreement. Please ensure that the necessary confidentiality document is purchased and executed PRIOR to the conclusion of the sale agreement. Please also ensure that the necessary individual confidentiality undertaking is purchased.
IT IS NECESSARY to ensure that the relevant confidentiality arrangements are in place, especially if the transaction does not go through. All necessary confidentiality undertakings (both corporate and individual) as well as confidentiality agreements are available for sale on this site at nominal prices.
AGAIN WE REITERATE that you may see clauses and appendices in this agreement that typically reside in a sale of business agreement; the reason for such is that we require that the seller provide certain undertakings concerning the business owned by the CC, the claims and member’s interest being sold; further there are suspensive conditions in the agreement relating to the business and due diligences in respect thereof; drafting the agreement as we have ensures that the purchaser is protected and performs the necessary checks.
This SALE OF MEMBER’S INTEREST AND CLAIMS agreement (where the CC only owns an underlying business and not immoveable property):
- is legally substantive (19 pages in total; 1.5 spacing); please feel free to look at the explanatory notes below and compare the substance of this agreement to others for sale elsewhere;
- is bordered;
- has pages numbered;
- is fully justified;
- is typed up using Bookman Old Style font, size 11;
- has been meticulously spell-checked;
- is extremely professional in its appearance;
- has several drafting notes therein to guide a legal practitioner;
- may be printed onto 19 A4 pages. (In the interests of the environment, it is suggested that the agreement rather be printed back to back on 10 pages.).
This SALE OF MEMBER’S INTEREST AND CLAIMS agreement (where the CC only owns an underlying business and not immoveable property) contains the following clauses:
- DEFINITIONS AND INTERPRETATION
- SUSPENSIVE CONDITIONS
- GOOD FAITH
- SALE OF MEMBER’S INTEREST AND CLAIMS
- PURCHASE CONSIDERATION AND PAYMENT
- CESSION, ASSIGNMENT AND DELEGATION OF THE CLAIMS
- FINANCIAL STATEMENTS
- WARRANTIES CONCERNING THE MEMBER’S INTERESTS, THE CLAIMS AND THE BUSINESS
- RESOLUTION AND AUTHORITIES
- DOMICILIUM AND NOTICES
APPENDIX 1: TRADEMARKS, BRANDS AND DESIGNS
APPENDIX 2: LEASED ASSETS
APPENDIX 3: FIXED ASSETS
Please read carefully through the agreement and fill in all missing details; in preparing a signature document, please have regard to all the notes we have placed therein to assist you with the conclusion of a professional, legally binding agreement.