Share Purchase Agreement
- A share purchase agreement (SPA) is a formal document that states the terms & conditions of the seller in relation to the sale and purchase of shares and assets within the company. It also includes any relevant warranties.
- A share purchase allows the buyer to acquire all the interests and benefits of the business, meaning that once the purchase is complete, they are given full ownership of it.
- A SPA may include the following:
- Agreement to sell & purchase sale shares -This relates to the transfer of the legal title.
- Consideration – Purchase price & method of payment. It is important for the seller to ensure that the buyer has the appropriate funds.
- Warranties & indemnities – Negotiations relating to the sale of the company
- Completion- Lists all the documents required to be exchanged between the parties and actions needed to complete the sale.
Asset Purchase Agreement
- An Asset purchase agreement (APA) is a formal document that details the terms & conditions of the sale and purchase of company assets.
- When an asset purchase is complete, ownership of the company will remain with the original owner and the buyer will only be responsible for the assets which he has purchased.
- There are a number of provisions that will likely be included in an APA:
- Agreement to sell & purchase – Ensures that the proper title to the assets is correctly transferred to the buyer will all the rights included.
- Consideration – Purchase price & method of payment.
- Indemnities – Promises given by the seller to reimburse the buyer if any loss should result from the contingent liabilities.
- Warranties – Statements that the seller makes regarding specific elements of the company. The seller must declare that these statements are correct and that failure to make correct statements about the business will be a breach.
We are happy to help
Our business solicitors in Wrexham have experience dealing with both big and small companies, so whether you need help drafting a share purchase agreement or business sales agreement, or just want general advice in the sale or purchase of a company, we are happy to help!
For legal advice you can rely on, contact our Wrexham Company Lawyers today.
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