A Share Purchase Agreement (SPA) is a legally binding contract used in Australia to record the agreed terms for the transfer of shares in a company from a seller to a buyer. It is the primary transaction document for any share sale — whether a founder exits a small proprietary company, a majority shareholder sells to a strategic buyer, or one business acquires another through a share acquisition rather than an asset purchase.

In Australia, companies are incorporated and regulated under the Corporations Act 2001 (Cth), a federal statute administered by the Australian Securities and Investments Commission (ASIC). When shares in an Australian company change hands, the transfer must comply with both the Corporations Act and the company's own constitution. The SPA provides the contractual framework that governs the entire sale process: from the agreement on price and completion mechanics, through to the warranties and representations that the seller provides about the company and the shares.

A well-drafted Australian SPA will address several important legal and tax matters that distinguish it from share sale agreements used in other common law jurisdictions. First, stamp duty is a state and territory tax in Australia, and the liability to pay duty on a share transfer — and the applicable rate — depends on the nature of the company's assets and the jurisdiction in which the transaction is effected. Second, the capital gains tax (CGT) framework under the Income Tax Assessment Act 1997 (Cth) applies to the seller's realisation of the shares, and the SPA should include appropriate CGT warranties and disclosures. Third, the constitutional transfer restrictions and ASIC notification obligations that apply under the Corporations Act must be addressed in the completion mechanics.

This template is suitable for the sale of shares in Australian proprietary companies (Pty Ltd) and is governed by the laws of the Australian state or territory selected by the parties.

A Share Purchase Agreement is required in Australia whenever a shareholder sells or transfers shares in a company to another person or entity for value. The most common situations include:

Business acquisitions — when one company or individual acquires all or a controlling interest in another company through share purchase rather than an asset purchase. A share acquisition allows the buyer to acquire the entire legal entity, including all assets, contracts, employees, and liabilities.

Founder or co-founder exits — when one of the founders of a start-up or small business wishes to exit, the remaining founders or new investors typically purchase the departing founder's shares under a formal SPA.

Investor buy-outs — when an angel investor, private equity firm, or other financial investor liquidates their stake in a portfolio company.

Management buy-outs (MBOs) — when the management team of a company acquires the shares from the existing owner, often with the assistance of third-party financing.

Employee share plans — when an employee who holds shares under an employee share plan (ESP) or employee share scheme (ESS) exits the company and their shares are purchased back by the company or remaining shareholders.

Succession planning — when a business owner transfers shares to family members, a family trust, or a business successor as part of an estate plan or business succession strategy.

An SPA is always preferable to an informal or undocumented share transfer. Without a written agreement, the parties may dispute the agreed price, the warranties given, the completion obligations, and the allocation of tax liabilities and stamp duty.

A Share Purchase Agreement for use in Australia should contain several key provisions that reflect the specific requirements of Australian company law, taxation law, and commercial practice.

Definitions and structure — The SPA should clearly define the parties (Seller and Buyer), the target company (with its full name and ACN as registered with ASIC), the shares being transferred (number, class, and price per share), and the completion date. The total purchase price must be stated in Australian dollars.

Completion mechanics — The SPA must specify what each party is required to do at completion: the seller must deliver a duly executed instrument of transfer, the share certificate(s), and any board or shareholder approvals required under the Corporations Act or the company's constitution; the buyer must pay the purchase price in the agreed manner.

Stamp duty allocation — Given that stamp duty is a state and territory tax, the SPA should expressly allocate the obligation to pay stamp duty and specify which party is responsible for lodging the transfer documents with the relevant revenue office. In most ordinary share transfers (other than landholder duty scenarios), the buyer is responsible for stamp duty.

CGT warranties — The seller's capital gains tax position is relevant both to the seller (who must calculate and report the capital gain) and to the buyer (who will want to understand the tax history of the shares, particularly for company reorganisations or future disposals). The SPA should include appropriate CGT warranties from the seller.

Seller warranties — The seller should warrant title to the shares, authority to sell, and the accuracy of representations about the company. Warranty periods should be aligned with the ATO's standard amendment periods: 18–24 months for general warranties and up to 7 years for tax warranties.

Corporations Act compliance — The SPA must address how the transfer will be effected in compliance with the Corporations Act, including the constitution's transfer restrictions, board approval requirements, ASIC notification obligations, and registration of the transfer in the company's share register.