What is a Share Purchase Agreement?

A Share Purchase Agreement, also called a Stock Purchase Agreement, is used to transfer the ownership of shares (also called stock) in a company from a seller to a buyer. Shares (or stock) are units of ownership in a company that are divided among shareholders (also called stockholders). The amount of shares held by a shareholder determines their percentage of ownership in the company and the dividend payment that they are eligible for, if the company pays out dividends. A dividend payment is money paid to shareholders, usually resulting from a distribution of a company's annual profits.

Who needs a Share Purchase Agreement?

A Share Purchase Agreement should be used any time an individual or corporation is selling or purchasing shares in a company to or from another person or business entity. For example, if you and two business partners all have equal shares in a company and one partner wishes to withdraw, a Share Purchase Agreement can be used to purchase the withdrawing partner's shares. When purchasing all of the shares in a business (100% of the shares), it's recommended that you use a ProductLink code="CBUSPS" text="Purchase of Business Agreement" instead.

What information is included in a Share Purchase Agreement?

A Share Purchase Agreement generally includes information about: The person selling the shares The person buying the shares The number of shares being sold and their value The company the shares are being transferred from The number of shares being sold and their value The type and class of the shares being sold (e.g. Class A Common Voting) What law governs the agreement A Share Purchase Agreement also includes payment details, such as whether a deposit will be required, when the full payment is due, and the closing date of the agreement.

What are the different types of shares?

When creating a Share Purchase Agreement, it is important to include details about the shares being sold, such as the type of shares. Common, preferred, voting, and non-voting are all terms that can be used to describe shares. The class of shares, common or preferred , can impact the shareholder's portion of company profits or the amount they receive in the event that the company is liquidated, and whether a shareholder has voting or non-voting shares determines whether the shareholder is or is not eligible to vote at shareholders' meetings. A common share is a type of share that is held most frequently by shareholders. A preferred share is generally a more valuable type of share that can mean different things to a company depending on what was agreed upon during the company's incorporation. Oftentimes, preferred shares are non-voting. In addition, shareholders with preferred shares will typically receive priority for profits (or liquidation, if it occurs) as compared to common shareholders. Keep in mind, most corporations will have common shares, but not all will have preferred shares. Companies that offer multiple types of shares will also sometimes have a series (Class A, Class B, Class C, etc.), which can be worth different monetary amounts. For instance, 100 Class A Common Voting Shares may not be worth the same value as 100 Class B Common Voting Shares. A company's share structure can often be found in the company's ProductLink code="CINCRP" text="Articles of Incorporation".

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Share Purchase Agreement

Seller Details

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Corporation/Organization

Individual

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Frequently Asked Questions

What is a Stock Purchase Agreement?A Stock Purchase Agreement is a sales agreement used to transfer and assign ownership (shares of stock) in a corporation. The Seller is the current Shareholder of the Shares for sale.

Your Share Purchase Agreement

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SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT (the "Agreement") made and entered into this ________ day of ________________, ________ (the "Execution Date"),

BETWEEN:

____________________ of ______________________________
(the "Seller")

OF THE FIRST PART

and

____________________ of ______________________________
(the "Purchaser")

OF THE SECOND PART

BACKGROUND:

The Seller is the owner of record of __________ ____________________ shares (the "Shares") of ____________________ (the "Corporation").
The Seller desires to sell the Shares to the Purchaser and the Purchaser desires to purchase the Shares from the Seller.

IN CONSIDERATION OF and as a condition of the parties entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows:

Purchase and Sale
Except as otherwise provided in this Agreement, all monetary amounts referred to in this Agreement are in USD (US Dollars).
The Seller agrees to sell and the Purchaser agrees to purchase all the rights, title, interest, and property of the Seller in the Shares for an aggregate purchase price of $__________ (the "Purchase Price").
A fixed sum of $__________ will be payable on closing of this Agreement.
All payments will be in the form of certified check, wire transfer, or bank draft of immediately available funds. In the case of a direct wire transfer the Seller will give notice to the Purchaser of the bank account particulars at least 5 business days prior to the Closing Date.
Representations and Warranties of the Seller
The Seller warrants and represents to the Purchaser as follows:
1. The Seller would not be recognized as an issuer, insider, affiliate, or associate of the Corporation as defined or recognized under applicable securities laws and regulations.
2. Except as provided in the incorporating documents of the Corporation or as indicated on the face of the certificates for the Shares, the Purchaser would not be prevented or restricted in any way from re-selling the Shares in the future.
3. The Seller is the owner in clear title of the Shares and the Shares are free of any lien, encumbrance, security interests, charges, mortgages, pledges, or adverse claim or other restriction that would prevent the transfer of clear title to the Purchaser.
4. The Seller is not bound by any agreement that would prevent any transactions connected with this Agreement.
5. There is no legal action or suit pending against any party, to the knowledge of the Seller, that would materially affect this Agreement.
Representations and Warranties of the Purchaser
The Purchaser warrants and represents to the Seller as follows:
1. The Purchaser would not be recognized as an issuer, insider, affiliate, or associate of the Corporation as defined or recognized under applicable securities laws and regulations.
2. The Purchaser is not bound by any agreement that would prevent any transactions connected with this Agreement.
3. There is no legal action or suit pending against any party, to the knowledge of the Purchaser, that would materially affect this Agreement.
Closing
The closing of the purchase and sale of the Shares (the "Closing") will take place on March 21, 2023 (the "Closing Date") at the offices of the Seller or at such other time and place as the Seller and the Purchaser mutually agree. At Closing and upon the Purchaser paying the Purchase Price in full to the Seller, the Seller will deliver to the Purchaser duly executed transfers of the Shares.
Expenses
All parties agree to pay all their own costs and expenses in connection with this Agreement.
Finder's Fees
No party to this Agreement will pay any type of finder's fee to any other party to this Agreement or to any other individual in connection to this Agreement.
All parties to this Agreement warrant and represent that no investment banker or broker or other intermediary has facilitated the transaction contemplated by this Agreement and is entitled to a fee or commission in connection with said transaction. All parties to this Agreement indemnify and hold harmless all other parties to this Agreement in connection with any claims for brokerage fees or other commissions that may be made by any party pertaining to this Agreement.
Dividends
Any dividends earned by the Shares and payable before the Closing of this Agreement will belong to the Seller, and any dividends earned by the Shares and payable after the Closing of this Agreement will belong to the Purchaser.
Any rights to vote attached to the Shares will belong to the Seller before the Closing and will belong to the Purchaser after the Closing.
Governing Law
The Purchaser and the Seller submit to the jurisdiction of the courts of the Commonwealth of Virginia for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement. This Agreement will be enforced or construed according to the laws of the Commonwealth of Virginia.
Miscellaneous
Time is of the essence in this Agreement.
This Agreement may be executed in counterparts. Facsimile signatures are binding and are considered to be original signatures.
All warranties and representations of the Seller and the Purchaser connected with this Agreement will survive the Closing.
This Agreement will not be assigned either in whole or in part by any party to this Agreement without the written consent of the other party.
Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine gender include the feminine gender and vice versa. Words in the neuter gender include the masculine gender and the feminine gender and vice versa.
If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Agreement will in no way be affected, impaired or invalidated as a result.
This Agreement contains the entire agreement between the parties. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final written Agreement. All such statements are declared to be of no value in this Agreement. Only the written terms of this Agreement will bind the parties.
This Agreement and the terms and conditions contained in this Agreement apply to and are binding upon the Seller and the Purchaser and their respective successors, assigns, executors, administrators, beneficiaries, and representatives.
Any notices or delivery required here will be deemed completed when hand-delivered, delivered by agent, or seven (7) days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
All of the rights, remedies and benefits provided by this Agreement will be cumulative and will not be exclusive of any other such rights, remedies and benefits allowed by law.

IN WITNESS WHEREOF the Seller and Purchaser have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.