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Share Purchase Agreement Between Two Individuals

PandaTip: these statements are all warranties of the seller: (a) means that the company has been and officially exists; (b) means that there are no problems between the enterprise and the State in which it was established and that all outstanding requirements have been met; © means that there is no litigation, either to come or at present with the company; (d) means that the seller is the only person holding the shares; (e) means that there is no legal restriction on the shares and that the buyer holds them without restriction at the end of the transfer; (f) means that the seller has the right to sell the shares without an agreement with another person or company; and (g) means that seller has not entered into agreements with other persons that grant rights in the shares to other persons. The structure of a company`s shares is often found in the company`s articles of association. A share purchase agreement is a contract for the sale and purchase of a declared number of shares at an agreed price. The shareholder who sells his shares is the seller and the party who buys the shares is the buyer. This agreement describes the conditions of sale and purchase of the shares. The number of shares held by a shareholder determines his percentage of the company`s ownership and the payment of dividends for which they are eligible when the company pays dividends. The payment of a dividend is the money paid to shareholders and usually results from a distribution of a company`s annual profit. The class of common shares or preferred shares may affect the shareholder`s share of the company`s profit or the amount he receives in the event of the liquidation of the company, and whether a shareholder has voting shares or not, determines whether the shareholder has the right to vote at general meetings. For example, if you and two partner partners are all equally involved in a business and a partner wishes to resign, a share purchase agreement can be used to purchase the affiliate`s shares. What information must be included in the share purchase agreement? The SPA focuses on the agreement for the seller to sell the shares of the target company and the buyer to buy. Normally, the seller agrees to sell the shares “with full ownership guarantee” – this particular period has the effect that the seller owns the shares in full, has the right to sell them, will do everything in his power to transfer it to the buyer, and the shares are not subject to third party rights or restrictions. In the event of a sale of shares between two parties, a draft SPA is normally drawn up by the buyer`s legal representatives, since the buyer is most interested in the SPA protecting them from debts after the sale.

When a business is sold at an auction, the seller`s lawyers usually draw up a draft contract for the sale of shares and make them available to those interested bidders for consultation. After negotiating the terms of the SPA and the due diligence process, the parties each sign the SPA, the buyer pays the purchase price and the shares are formally transferred to the buyer through a transfer form. As a rule, this takes place on the same day. When someone sells their shares in a company, they often hope to get a clean breakup. However, since some corporate commitments – especially tax-related ones – are only revealed after the transaction, buyers need to make sure that outgoing owners stay on the hook, and this is one of the main purposes of the main sale document, the share purchase agreement. . . .