Get help drafting a contract note
A contract note is an important document for share transactions, both for buyers and sellers. It serves as a receipt for a completed share transaction and can also act as an agreement between the parties. The note is an essential record, both for proving that the transaction has occurred and when reporting share transactions for tax purposes.
A contract note is a written document that specifies all the details of a share transaction. It confirms that shares have changed ownership and contains all the relevant information both the buyer and seller need. To make sure the transaction is correctly documented and that all parties agree, it’s important that the note is clear and includes all necessary details.
Key points
For a contract note to be complete and valid, it should include the following details:
- Parties’ information
The note should include the names and contact information of both the buyer and seller. This ensures that both parties are properly identified. - Share number series
The document should specify the share number series. This clarifies exactly which shares are included in the transaction. - Number of shares
The exact number of shares involved in the transaction should be specified. This helps avoid misunderstandings about the number of shares that have changed hands. - Price per share
The price for each share should be stated in the contract note, along with the total amount for the entire transaction. - Date of transfer
The date when the shares formally change ownership should be clearly stated. This date is crucial for both the buyer and seller, especially for tax reporting. - Payment terms
Details on how and when the payment will be made should be included, such as the payment method and timelines.
Signatures and validity
For the transfer of existing shares, both the buyer and seller have to sign the contract note for it to be valid. However, for a new share issue, where the company issues new shares to raise capital, only the seller’s signature is required. A properly completed and signed contract note is essential for ensuring that the transaction is legally binding.
Why it’s important
A contract note protects both the buyer and seller. It ensures that both parties have a clear and shared understanding of the terms of the share transaction. Additionally, it’s a necessary document for reporting share transactions in tax declarations, as it provides a detailed account of the transaction.
What we help with regarding contract notes
Legal consultation
We provide advice on how to prepare a correct contract note and ensure that all necessary details are included.
Drafting and documenting
We’ll help you draft a contract note that’s legally binding and protects all parties in the share transaction.
Review of existing documents
If you already have a note, we’ll review it to make sure it meets all requirements and protects your interests.
Get legal help today
Do you need help with contract notes? You can always get in contact with our lawyers within just 24 hours when you need quick answers to your questions. Or you can email or call us whenever you need to hire a lawyer for legal assistance.
FAQ asked questions about contract notes
Do I always need a contract note when buying or selling shares?
Yes, it’s necessary to document and prove that the share transaction has taken place.
What happens if there’s an error in the contract note?
An error in the note can lead to misunderstandings and problems, especially during tax reporting. Therefore, it’s important to carefully review the note before signing it.
Can I use a contract note as evidence in a dispute?
Yes, you can use it as evidence in a legal dispute, as it documents all the terms and details of the share transaction.
