Who can use this Share Sale and Purchase Agreement?
The owners of a company who want to sell their shares and/or a potential buyer who wants to take over a company can use this share sale and purchase agreement (SPA).
If you want to buy or sell the assets of business instead of the shares, we have a suitable template here
What is this Agreement for?
This agreement is for the sale and purchase of a limited company by the sale of all of the shares in the company to the purchaser(s). This agreement is suitable for the acquisition or disposal of a small or medium sized company which has no subsidiaries.
What are the main issues in a share sale?
Due diligence by the buyers is very important: this should be in progress while the formal sale and purchase agreement is being negotiated.
Warranties. The sellers will give several warranties in the SPA with regard to the business– e.g. that the accounts are up-to-date & all employees have been properly paid. They will also give a disclosure letter to deal with any anomalies – claims, disputes etc.
Price and payment. The price will usually be paid on completion but sometimes there is more than one payment and/or an adjustment depending on future conduct of the business.
Completion procedure: the sellers will hand over their share certificates with signed share transfers; resignation letters from directors; board resolutions to authorise the transaction and appoint the directors nominated by the buyers etc. The procedure can be quite complicated.
Non-competition: usually the sellers will undertake not to compete with the business, at least for an agreed period. They may also agree not to poach staff or customers or use a name similar to that of the company.
What detailed terms does the Agreement contain?
This nine page share sale agreement contains 13 clauses covering
- sale and purchase
- sale price
- further assurance
- payment of costs
- announcements and confidentiality
- law and jurisdiction
- a general clause detailing variation, the scope of the agreement, repseverability, assignment and third party rights
An annexure allows for a disclosure letter to be written by the sellers.
You need this document if you want to buy or sell a small or medium-sized limited company, and want to buy or sell all shares in the company
For more information on each of these sections, see our Explanatory Notes which you will receive when you download the document from our website
If you want to see these Notes before you buy, please let us know by using our contact form
For information on signing documents see our Contract Signing page
When I download the document, can I change it and/or use it more than once?
Yes, all ContractStore’s templates are in MS Word and you can use the contract on more than one project. For more information, watch the video on this page of our website or see our FAQs
ContractStore supplies templates and is not a law firm. But experienced lawyers write all our templates so we can arrange legal assistance for customers who need special terms in one of our documents or a bespoke template. . For more information see our Legal Services page.
And if you want to contact us see our Contacts page.
Contract author: commercial solicitor, Giles Dixon
If you have any questions about a contract and/or want to see the Explanatory Notes before you buy, please let us know by using our contact form