Un Share Purchase Agreement
The share purchase agreement is a legal document that defines the conditions under which the shares are transferred to a company. It distinguishes between the sale of all shares of a company and a partial sale. There are at least two parties to this agreement: a sales company holding the title rights to the shares and a buying company. As a general rule, shares are transferred for cash. However, it is also possible to pay equity with shares, in-kind contributions or media. On that day, it is customary for the parties to the agreement, buyers and sellers, to appear before a notary to confirm their agreement and to continue the payment of the sale price and the delivery of the shares taking into account the ownership of the fully transferred shares (the “final phase”). All of this will be reflected in a public document that will serve as reliable evidence of articulated activities. In addition, shareholder agreements often provide that share purchase contracts can be used in all cases where one person or agreement sells shares to another. Agreements are most used when the shares in question are transferred to companies in two different countries, under two different legal systems, or when the shares are sold outside a standard trading platform or a stock exchange. BSBs also contain detailed information about buyers and sellers. The agreement covers all pre-negotiation filings and recognizes parts of the agreement that have already been concluded. The agreement also covers the date of the final sale. There are also some risks associated with implementing a shareholder agreement in some countries.
Since the buyer inherits a business, buying shares is generally much riskier than buying assets. This justifies the introduction of necessary safeguards to protect the buyer. However, this flexibility can lead to conflicts between a shareholder contract and a company`s constitutional documents. Although laws vary from country to country, most conflicts are usually resolved as follows: If you plan to sell your business before the sales contract, you must go through different phases that will help you maximize the final price. These measures can be decisive for the future of the company. If you need instructions from a reliable team during the process, please contact us. The contract consists of five main parts: (1) Description of the transaction; (2) the terms of the contract; (3) representations and guarantees; (4) limitations of liability; (5) conditions. Before the agreement is reached, a Memorandum of Understanding is established to explain the proposed sale. The buyer must exercise due diligence and ensure that the sales contract and the MOU have the same conditions. The seller should focus on the distribution and purchasing sector as well as the area of guarantees and representations.