Share purchase agreement
- Solicitor approved
- Plain English makes editing easy
- Guidance notes included
- Money back guarantee
About this Share purchase agreement
It is usually the buyer who prepares a share sale agreement. But because there is great advantage in presenting the first version, we have included provisions that benefit both sides. Our notes guide you as to which ones strengthen your position and which ones favour the other side.
Strong protection for the buyer
The document provides the same high level of protection to the buyer that you would expect for the sale of a whole company including a choice of 125 warranties, a penalty payback provision if net profit is less than a certain agreed sum, and limited warranties from remaining shareholders.
Advantage for the seller
The document can also be used by a seller, either to produce an agreement that doesn’t favour the buyer as strongly, or as a guidance document to understand what might be seen as fair and reasonable compared to the document now presented by the buyer or his solicitors.
The agreement provides the framework to protect the interests of the selling shareholders to the extent that you choose. For example, there is an option to include a guarantor and an option for one of the selling shareholders to be a trustee (as a trustee, he cannot give full warranties). If the seller doesn’t present the agreement to the buyer, he may still wish to include such clauses in the buyer’s document.
A warranty is a promise that something is as it is described, and which, if untrue, can allow the side relying on that information to seek compensation.
This document differs from many other share sale agreement templates in the number of warranties included.
Warranties are important for two reasons.
The first is that they protect the buyer, who does not have the same information as the seller about the state (and value) of the company.
The second is that they can improve the buyer’s position. Because it is normal practice for buyers to demand warranties, sellers often give them without being sure about whether the situation is as warranted. Buyers can take advantage by asking for more warranties than they might need, and later seeking compensation for those that turn out to be false.
We provide a very full set of warranties, in plain English so it is easy to choose whether you want each to be given or not. Sellers will, obviously, want to limit the warranties given.
The law relating to this agreement
The framework of the deal is the Business Corporations Act . Within that framework, there are no special requirements as to what your deal should be.
This agreement is for a sale where no new shares are issued - the buyer simply purchases the shares owned by someone else.
Sometimes, you may want to change relative ownership proportions at the same time as the sale by subscribing to newly issued shares. For example, you may buy the shares of a departing shareholder and then invest additional equity to obtain a majority shareholding. In that case, you will need a Share purchase and subscription agreement.
Alternatively, you may be just want to invest along side existing shareholders. In that situation, you need a Share subscription agreement. We also sell a simple shares subscription agreement for uncomplicated transactions that don’t require the warranties that the other documents have.
Contents of this share purchase agreement
- Definitions and interpretation: simple ways to avoid legalese and cover multiple situations of the same type
- Agreement for sale
- Calculation of minimum profit
- Completion of the deal and delivery of documents
- Warranties: sellers, trustee, non-sellers
- Restrictive agreement to prevent sellers from competing afresh
- Sellers protection provisions
- Various legal provisions usual in a document of this type
This document was written by a solicitor for Net Lawman. It complies with current Canadian law.
What other customers thought
Average customer rating
"I needed an Agreement and Google, as always, was where I headed. I found the Net Lawman site and initially I thought I needed a relationship type Agreement but the Lodger one was absolutely perfect.
I didn't think it would be so easy so would recommend your website to anybody who was looking for an Agreement to suit their needs."Wendy Auger
"I needed to start a company fast, I searched and after looking at a few websites I came across netlawman, by far the easiest around. I will be looking again for when I need future documents fast. Thank you."textcards
"Brilliant. I am most grateful to Net Lawman. Your service standard is unparallel. I would strongly recommend any individual or organisation to Net Lawman."Dr. Smarajit Roy