Share purchase agreement template

This a share purchase agreement template sample that you can use free of charge. You can copy and paste it into Microsoft Word or Google Docs and edit as you like.

Share Purchase Agreement

This Share Purchase Agreement (the "Agreement") is entered into on _________________________ [Date] by and between:

Seller: _________________________ [Seller Name] located at _________________________ [Seller Address] (the "Seller").
Buyer: _________________________ [Buyer Name] located at _________________________ [Buyer Address] (the "Buyer").

1. Sale and Purchase of Shares

1. Shares Being Sold

The Seller agrees to sell, transfer, and assign to the Buyer, and the Buyer agrees to purchase from the Seller:

Number of shares: _________________________ [Number of Shares]
Class of shares: _________________________ [Class or Type of Shares]
Company name: _________________________ [Company Name]
Company address: _________________________ [Company Address]

2. Purchase Price

The total purchase price for the shares shall be $_________________________ [Amount], payable by the Buyer to the Seller as follows:

Payment method: _________________________ [Payment Method]
Payment due date: _________________________ [Due Date]

2. Representations and Warranties

1. Seller Representations

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.
They have full authority to enter into this Agreement.
The Company is duly organized and in good standing.
All provided financial statements and disclosures are accurate to the best of their knowledge.

2. Buyer Representations

The Buyer represents and warrants that:

They have full authority to enter into this Agreement.
They have conducted their own due diligence and are satisfied with the results.
The funds used for the purchase are lawful and immediately available.

3. Closing

The closing of the transaction (the "Closing") shall take place on _________________________ [Closing Date] at _________________________ [Closing Location or Virtual Meeting Details].

At Closing:

The Seller shall deliver duly executed share transfer documents.
The Buyer shall deliver the purchase price in full.
Both parties shall execute any additional documents reasonably required to complete the transfer.

4. Post-Closing Obligations

The Seller agrees to assist in updating the Company’s share ledger to reflect the Buyer as the new shareholder.
Any required regulatory filings shall be completed within _________________________ [Number] days of Closing.
Both parties shall cooperate to finalize any transitional matters.

5. Termination

This Agreement may be terminated:

By mutual written consent of both parties.
By either party if the other breaches any material provision of this Agreement.
If Closing has not occurred within _________________________ [Number] days of the signing date.

In the event of termination, neither party shall have further obligations except as expressly stated herein.

6. Confidentiality

Both parties agree to maintain confidentiality regarding all non-public information obtained during negotiations and after the transaction, unless disclosure is required by law or written consent is provided.

7. Governing Law and Jurisdiction

This Agreement shall be governed by the laws of _________________________ [Your State or Country].
Any disputes shall be resolved exclusively by the courts of _________________________ [Your State or County].

8. Entire Agreement

This Agreement constitutes the entire understanding between the parties and supersedes all prior negotiations, discussions, or agreements, whether written or oral.

IN WITNESS WHEREOF, the parties hereto have executed this Share Purchase Agreement as of the date first above written.

Seller
Signature: _________________________ [Signature]
Name and Title: _________________________ [Name and Title]
Date: _________________________ [Date]

Buyer
Signature: _________________________ [Signature]
Name and Title: _________________________ [Name and Title]
Date: _________________________ [Date]

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What's a Share Purchase Agreement?

A share purchase agreement (SPA) is a legally binding contract between a buyer and a seller that outlines the terms and conditions governing the sale and transfer of shares in a company. This document plays a crucial role in mergers, acquisitions, and investments, ensuring transparency, protecting both parties, and clearly defining the rights and obligations involved in the transaction. In this article, we'll break down the key components of a share purchase agreement, why it matters, and what to consider when drafting or signing one.

1. Definition and Scope

A share purchase agreement defines the number and type of shares being sold, the purchase price, and the specific rights attached to those shares. It outlines the company's details, the buyer’s and seller’s intentions, and the nature of the transaction—whether it’s a full acquisition, partial sale, or strategic investment.

The SPA typically specifies:

The exact number of shares being transferred
The class or category of shares
Any restrictions or conditions tied to the shares
Whether the purchase gives the buyer majority or minority ownership

2. Parties Involved

The contract identifies the parties participating in the transaction:

The Seller, who owns the shares and agrees to transfer them
The Buyer, who is purchasing the shares

It includes full contact details, legal identifiers, and clarifies each party's authority to enter into the agreement. If there are multiple sellers or buyers, the agreement will define their relationship and shared responsibilities.

3. Terms and Conditions

SPAs detail the commercial and legal terms governing the sale, including:

Purchase price and payment schedule
Payment methods (bank transfer, escrow, installments, etc.)
Adjustments based on company performance or liabilities
Conditions precedent (requirements that must be met before closing)
Representations and warranties from both parties
Liability limitations and indemnities
Dispute resolution mechanisms

These terms protect both sides and prevent conflict by making expectations explicit.

4. Duration and Closing

Unlike service contracts, SPAs typically revolve around a single transaction, but they still specify essential timing details:

The signing date
The closing date when the final transfer occurs
Any deadlines for due diligence, regulatory filings, or approvals

The closing section outlines what each party must deliver—such as payment, transfer documents, updated share registers, and any required corporate resolutions.

5. Representations and Warranties

One of the most critical parts of an SPA, these statements provide assurances about the state of the company and the shares being sold.

They may cover:

Ownership and legality of the shares
Company financials
Existing debts or liabilities
Lawsuits or disputes
Intellectual property
Compliance with laws and regulations

Misrepresentations can lead to claims, penalties, or contract termination.

6. Legal Compliance

SPAs must comply with applicable corporate, tax, and securities laws. Depending on jurisdiction and company size, regulatory filings or approvals may be required. The agreement may also reference compliance with industry standards, accounting principles, or shareholder agreements already in place.

Ensuring legal compliance minimizes risk and protects both parties from unintended legal consequences.

7. Confidentiality

Because SPAs often involve sensitive financial and strategic information, confidentiality clauses are standard. These provisions protect:

Company financial data
Trade secrets
Intellectual property
Business strategies
Negotiation details

The agreement may also restrict public announcements until after the transaction is complete.

Conclusion

A share purchase agreement is a foundational document in any transaction involving the sale or transfer of shares. It clarifies responsibilities, safeguards both parties, and helps prevent disputes by defining expectations before money or ownership changes hands. Whether you're buying or selling shares—especially in private companies—understanding the structure and purpose of an SPA is essential. A well-drafted agreement ensures transparency, reduces risk, and sets the stage for a smooth and legally secure transaction.