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Asset for Share Sale Agreement Sec 42 Agreement Two Parties
Business Law
- Tax-Neutral Rollover: The agreement is specifically structured to comply with Section 42 of the Income Tax Act, allowing for a tax-efficient asset-for-share transaction.
- Equity Allotment: The Transferee issues a specific number of ordinary no-par value shares to the Transferor, representing a defined percentage of the company's issued shares.
- Voetstoots Basis: Assets are transferred without any express or implied warranties, placing the risk regarding asset condition on the Transferee.
- Securities Transfer Tax Exemption: Provisions are included to authorize affidavits for tax exemptions under the Securities Transfer Tax Act.
- Corporate Authorization: The contract requires formal Annexures including unanimous shareholder and board resolutions to ratify the transaction for both legal entities.
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