A share purchase agreement (SPA) is an agreement that defines the terms of sale and purchase of shares of a company. After the stock seller concludes, the seller is not responsible for the company`s debts, which are the responsibility of the new owners. A company has its own legal personality on the part of its boards of directors and shareholders. In comparison, when selling assets, with a few exceptions (for example. B employees), the seller retains all of the company`s current liabilities, unless he can negotiate with the buyer to take care of them with the company. The acquisition of shares is the acquisition of a company`s operating activities. None of the existing contracts with the company change. When a shareholder sells its shares in a company, it achieves a complete break in the relationship between it and the target business. However, the buyer will insist on a number of contractual commitments concerning the company (guarantees) that will bind the shareholder after the sale.
A share purchase agreement should be used whenever a person or company sells or buys shares in a company or another person or company. When creating a share purchase agreement, it is important to give details of the shares sold, for example. B the type of actions. Common, preferential, voting and non-voting terms are terms that can be used to describe shares. The class of common or pre-weighted shares may affect the shareholder`s share of the company`s profits or the amount it receives when the company is liquidated and whether a shareholder has voting or non-voting shares, decides whether or not the shareholder has the right to vote at shareholder meetings. The amount of shares held by a shareholder determines their share of the ownership of the company and the payment of the dividend to which they are eligible if the company distributes dividends. A dividend payment is money paid to shareholders and is usually the result of a distribution of a company`s annual profit. A typical share purchase agreement addresses the following questions: While the guarantees are advantageous, the party giving them must be able to support them. If a buyer acquires shares, all the guarantees given by the seller are given by him personally. A share purchase agreement is itself a private document and it is not necessary to submit it to Companies House. However, you should inform Companies House of the change in the holding of shares in the target company`s next annual performance.
A share purchase agreement transfers shares between individuals. In the case of a share purchase agreement, the company would not be a party to the agreement. Once the shares of the target transaction are transferred, the property is transferred to the buyer.