A share purchase agreement (SPA) is an agreement that defines the terms of sale and purchase of shares of a company. A share purchase agreement is defined as a legal contract between a seller and a buyer. They can be called sellers and buyers in the contract. The specific number of shares is shown in the contract at the stated price. This agreement proves that the sale and the terms of the sale were agreed upon by mutual agreement. The shareholders` pact is concluded primarily to resolve problems and disputes between shareholders and the company. We cannot always be sure that nothing goes wrong, and in such circumstances, where nothing is certain, such agreements will help us resolve problems and disputes if this happens and maintain a strong relationship between shareholders and the company. It also contributes to the protection of a shareholder`s investment and establishes the rules and rules applicable to shareholders and other parties related to the company. A share purchase agreement also contains payment details, z.B if a down payment is required when the full payment is due, and the closing date of the agreement. After the stock seller concludes, the seller is not responsible for the company`s debts, which are the responsibility of the new owners.
A company has its own legal personality on the part of its boards of directors and shareholders. In comparison, when selling assets, with a few exceptions (for example. B employees), the seller retains all of the company`s current liabilities, unless he can negotiate with the buyer to take care of them with the company. When all shares of the company are sold, the agreement generally contains provisions designed to prevent the seller from doing so: there are two common aspects that create and establish the relationship between the two parties. This is the shareholder contract and the share purchase agreement. One party uses it so that the other party that invests can also participate in the process. The terms of compensation eventually granted by the buyer or seller are also presented, which covers all costs that may result from the transaction due to conditions that were met prior to the closing of the transaction. A special tax treatment to which the buyer or seller may be entitled is also mentioned in the contract. Each of these mechanisms or variants has its drawbacks and shareholders should understand the impact before entering into a long-term agreement that will affect their investments. The pros and cons of different approaches are summarized in the table above. Most companies and shareholders prefer to enter into an agreement based on the Corporations Act, which essentially authorizes the provisions on all other points.
In particular, it guarantees accountability on the basis of rights, with a responsibility for both parties, which provides considerable assistance to the proceedings. A contract to buy and sell shares is an agreement for the sale and purchase of a given number of shares at an agreed price.