Share Purchase Agreement Content

October 8, 2021

The owner sought the help of an experienced legal advisor in much larger transactions. During the discussions on the share purchase agreement, more and more questions were raised by the seller`s lawyer. This began to bother the buyers` in-house legal counsel and their financiers. At the same time, the seller and his wife began to feel uncomfortable with the buyer`s requests. They began to view the buyer`s team as inflexible and feared that this would impact the future of the business. Before everyone involved in the transaction (including me) realized that the momentum was gone. The result was an agreement that went perfectly together at first, had become furious. As an advisor to the seller, I had to have more on my head? Was the seller`s legal counsel in order to run his own show “One Man”? The salespeople, very experienced, team too inflexible? The share purchase agreement is a legal document defining the conditions under which the shares are transferred to a company. It distinguishes between a transfer of all the shares in a company and a partial transfer. There are at least two parties to this agreement: a selling company holding the ownership rights to the shares and a buying company. As a rule, shares are transferred against payment in cash. But it is also possible to pay for equity with shares, benefits in kind or media. A share purchase agreement is a very important document for every M&A transaction.

Although this document is signed in a relatively late phase of the transaction, it remains an important step and a potential risk that a transaction will not be concluded. Having legal advisors who can appreciate and understand the position of both sides of the table is essential. Choosing the right M&A legal advisor and assigning the right mandate is an important task for every buyer and business owner. Prior to the conclusion of the agreement, a Memorandum of Understanding will be established to explain the planned sale. A buyer must have due diligence and ensure that the sales contract and the memorandum of understanding have the same conditions. The seller should specifically look at the sales and purchasing section and the guarantees and insurance section. The period of sale and purchase should have exactly the same conditions as the declaration of intent. If differences are found, this is likely due to the buyer`s due diligence and must be negotiated before the share purchase agreement is concluded.

A share purchase agreement is a contract for the sale and purchase of a declared number of shares at an agreed price. . . .