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Stock Purchase Agreement
Clearly document terms for buying or selling shares using this Stock Purchase Agreement Template.
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Stock Purchase Agreement
This Stock Purchase Agreement ("Agreement") is entered into as of [Date], by and between:
Seller: [Full Name / Company Name]
Address: [Seller’s Address]
and
Buyer: [Full Name / Company Name]
Address: [Buyer’s Address]
Collectively referred to as the "Parties."
1. Sale and Transfer of Shares
Seller agrees to sell, transfer, and deliver to Buyer, and Buyer agrees to purchase from Seller, the following shares:
Number of Shares: [Number of Shares]
Class of Shares: [e.g., Common / Preferred]
Corporation: [Corporation Name]
Price per Share: $[Price]
Total Purchase Price: $[Total Amount]
2. Payment Terms
The Buyer shall pay the Total Purchase Price to the Seller in full on [Closing Date], via [Payment Method – e.g., wire transfer, check].
3. Closing
The closing of the transaction ("Closing") shall take place on [Date] at [Location or “remotely via electronic exchange of documents”].
4. Representations and Warranties of Seller
The Seller represents and warrants that:
They are the legal and beneficial owner of the Shares.
The Shares are free of any liens, claims, or encumbrances.
The Seller has full authority to enter into this Agreement.
The Corporation is duly organized and in good standing.
5. Representations and Warranties of Buyer
The Buyer represents and warrants that:
They have the legal capacity and authority to enter into this Agreement.
They understand the risks and obligations associated with owning the Shares.
The purchase is being made for investment purposes (if applicable).
6. Conditions Precedent
Closing is subject to the satisfaction or waiver of the following conditions:
Delivery of share certificates (if applicable)
Execution of any required corporate approvals or consents
Fulfillment of applicable regulatory requirements
7. Indemnification
Each Party agrees to indemnify and hold the other harmless from any claims arising out of a breach of this Agreement.
8. Governing Law
This Agreement shall be governed by and interpreted in accordance with the laws of the State of [State].
9. Entire Agreement
This Agreement constitutes the entire understanding between the Parties and supersedes all prior negotiations or agreements, whether written or oral.
10. Counterparts and Signatures
This Agreement may be executed in counterparts and delivered electronically. All counterparts together shall constitute one document.
IN WITNESS WHEREOF, the Parties have executed this Stock Purchase Agreement as of the date first written above.
Seller Signature
Name:
Buyer Signature
Name:
Details
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Stock Purchase Agreement
STOCK PURCHASE AGREEMENT FAQ
What is a Stock Purchase Agreement?
A stock purchase agreement is a legally binding contract that formalizes the sale and transfer of ownership of company shares from a seller to a buyer. It specifies the number of shares being sold, the purchase price, representations and warranties from both parties, and the conditions that must be met before the sale is finalized. This agreement is essential for documenting the terms of a stock transaction, whether for a small private business or a large corporate deal.
Why do you need a Stock Purchase Agreement?
You need a stock purchase agreement to ensure that both the buyer and seller fully understand and agree to the terms of the transaction. It provides legal protection, outlines obligations, confirms the transfer of ownership rights, and reduces the risk of misunderstandings or disputes after the sale. It can also include clauses addressing non-compete obligations, confidentiality, and the handling of any outstanding liabilities, making it a critical safeguard for both parties.
When should you use a Stock Purchase Agreement?
Use a stock purchase agreement whenever buying or selling company shares or equity interests—whether for a controlling stake, a minority investment, or part of a corporate restructuring. It is particularly important in private company transactions, where the transfer of shares is not regulated by public market rules and must be documented privately.
How to write a Stock Purchase Agreement?
Start by identifying the buyer and seller, then specify the number of shares being transferred, the purchase price, and the payment terms. Include representations and warranties from both parties to confirm the accuracy of information provided. Outline any conditions precedent that must be met before closing, such as regulatory approvals or shareholder consent. Add provisions for indemnification, dispute resolution, and governing law. Both parties should sign and date the agreement, and it’s advisable to involve legal counsel to ensure compliance with securities laws.
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