Share Purchase Agreement

The agreement can be either between a single buyer and seller or between a seller and multiple buyers. In the latter case,  if the buyers are shell companies or companies created only for the purpose of effecting an SPA and lacking financial or administrative credibility, it should be ensured that Principals of such companies, i.e. heads of such companies are made Covenants/Guarantors to ensure payment or compensation in cases of fraud or non-payment. Thus, such an agreement helps in formalizing and executing sale of shares in an organized and legal manner.

A share purchase agreement is a formal contract signed between a buyer and seller with respect to purchase of shares. The agreement can be either between a single buyer and seller or between a seller and multiple buyers. In the latter case,  if the buyers are shell companies or companies created only for the purpose of effecting an SPA and lacking financial or administrative credibility, it should be ensured that Principals of such companies, i.e. heads of such companies are made Covenants/Guarantors.

SHARE PURCHASE AGREEMENT

 

BASIC INFORMATION

 

A share purchase agreement is a formal contract signed between a buyer and seller with respect to purchase of shares. The agreement can be either between a single buyer and seller or between a seller and multiple buyers. In the latter case,  if the buyers are shell companies or companies created only for the purpose of effecting an SPA and lacking financial or administrative credibility, it should be ensured that Principals of such companies, i.e. heads of such companies are made Covenants/Guarantors to ensure payment or compensation in cases of fraud or non-payment. Thus, such an agreement helps in formalizing and executing sale of shares in an organized and legal manner.

 

FEATURES OF MEMORANDUM OF UNDERSTANDING

 

1. Track of shareholder: The biggest advantage of share purchase agreement is that it  helps the companies to keep a track of shareholders and include them in decision making process. It also helps in keeping a creating a legal framework to protect the rights of seller.

 

2. Arbitration clause: Share purchase agreement also include clause of arbitration which will help you in case of dispute arises between the buyer and seller. Also agreement provides closing mechanism.

Documents


Passport Photo

Passport photo of all parties.


PAN Card

PAN card of all parties.


Aadhar Card

Aadhar card of all parties.


Utility Bill

Utility bill of Electricity or Telephone.


Address Proof

Valid Address Proof of all the parties.


Licence

Valid Driving Licence of all the parties.


Terms and Conditions

Terms and Conditions between the parties.


Other Documents

Other documents will be intimated through e-mail.

FAQ

Two parties, where one is a seller and the other is a buyer, often comes into an agreement called Share Purchase Agreement.

The purpose of Share Purchase agreement is to easily transfer the ownership of shares in a company from a seller to a purchaser.

Name of the purchaser of the shares Name of the seller of the shares Company from which shares being sold Value of shares The law that governs the agreement The type of shares that are being sold

A guarantee is a legally binding proclamation of affirmation given by the dealer to the purchaser that a specific situation exists. They are especially significant in share buy understandings, as they assign hazard and risk between the vender and purchaser.

A Share Purchase Agreement is a kind of principal business process which involves an investor in its activities. Though there are number of organizations that are willingly choose the path of easygoing strategy to deal with such issues, the absence of an agreement can put the future of business activities in jeopardy.

The share purchase agreement is the main document. It is normally drafted by the buyer although it is common for the seller to produce the first draft on an auction sale. Note. On an auction sale, the first draft of the share purchase agreement is generally prepared by the seller

A share purchase agreement (“SPA”) is typically entered into by and between a buyer and seller(s) of a target company's shares whereby the seller(s) agrees to sell a specific number of shares to the buyer for a specified price.