Share Purchase Agreement (SPA)
A share purchase agreement is a formal contract or agreement that states the relevant terms and conditions of a sale and purchase of shares within a business or company.
A share purchase allows the buyer to acquire all the interests and benefits of the business, meaning that on completion of the purchase, the buyer is given full ownership of the company and holds the legal title.
The complexity of a share purchase agreement (SPA) will vary depending on the nature of the sale and the terms of the parties, but it generally a lengthy document detailing information relevant to the parties.
The most common clauses in an SPA are:
- Parties – Details of the parties involved
- Conditions Precedent – Any necessary steps that a party needs to take in order for the completion of the sale (e.g. regulatory approval).
- Agreement to sell & purchase – Transfer of the title of the business
- Price consideration – Purchase price & method of payment.
- Warranties & Indemnities – Forms of contractual protection provided by the seller.
Asset Purchase Agreement (APA)
An Asset purchase agreement (which can also be called a business sales agreement), is a formal document which details the terms and conditions of the sale and purchase of company assets.
Unlike an SPA, when an asset purchase has been completed, the ownership of the business will remain with the original owner and the buyer will only be responsible for the assets which he has bought.
There are a number of clauses common to business sales agreements:
- Agreement to sell & purchase – This ensures that the proper title to the assets is correctly transferred to the buyer will all the rights included.
- Consideration – Purchase price and the method of payment.
- Warranties & Indemnities – Forms of contractual protection which is provided by the seller.
It would be beneficial for you to talk through the advantages and disadvantages of each agreement with one of our business lawyers in Warrington. At Freeman Jones, our Warrington company solicitors take a tailored approach to each client, meaning that your needs and requirements are considered at each step.
Our solicitors in Warrington understand the stress and pressure the sale of a business can cause, which is why we vow to refrain from using complex jargon and instead go through the process with you in easy-to-understand terms. Our business lawyers in Warrington understand that time is of the essence and will help you complete your goals as quickly as possible, whilst maintaining an excellent standard of work.
Contact our Warrington Company Solicitors today for cost-effective advice you can trust.
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