LawDepot`s share purchase agreement is intended for transactions that are facilitated without the assistance of an investment banker or broker (meaning finder fees are not included). The third party who discovers the sale of shares may claim compensation in the form of research costs, as it is likely that the buyer would not have made the deal without them. Our model is also for the warranties and insurance of the buyer and seller. These conditions specify the relationship of the parties with the company and how they are related (or not) to the agreement. A subscription contract is appropriate when new shares are issued – to recruit a new shareholder or increase the participation of an existing shareholder. It is intended for smaller and simpler transactions: the subscriber may already be familiar with the company (for example.B. he may be a director or a shareholder), or he may trust shareholders, or the transaction may present a low risk. Buying shares is the sale of a company`s property. On the other hand, the purchase of assets is the sale of every asset or liability of a business. An asset value of the company is, for example. B, an article or an intangible resource, for example. B: The document offers the possibility of referring to any loan that the buyer may grant.
The terms of a loan must be covered by a separate loan agreement The main difference between these types of purchases is that the seller retains ownership of a business with an asset purchase and loses ownership with a share purchase. When a seller transfers his shares, all assets and liabilities are transferred to the buyer`s book value. All contracts (for example. B leases) that the seller also transfers to the buyer. Therefore, buyers should be assured of carrying out their due diligence of the business in which they wish to invest. If the company establishes itself as a separate legal entity from its shareholders, the purchaser should not assume liabilities. It is a simple subscription contract for new shares for which the subscriber does not need guarantees as to the state of the company. The document offers strong protection to the buyer through a series of 115 guarantees, and by the possibility of “recovering” part of the seller`s purchase price in case the company does not produce expected profits. In addition to preferred and ordinary shares, a company can refer to its shares with a specific class structure. There are usually three classes (Classes A, B and C) that describe shares with different characteristics. For example, a Class A share may have more voting rights per share than a Class B or C share.
To learn more about the structure of a company`s shares, you can read the company`s founding articles or the stock listing in which the shares are auctioned.