A share purchase agreement (SPA) sets out the terms and conditions of the purchase and sale of company shares.
What is a share purchase agreement?
What is an asset purchase agreement?
An asset purchase agreement is made between a buyer and seller and sets out the terms and conditions of the purchase of assets.
What is the difference between an asset purchase agreement and a share purchase agreement?
An asset purchase agreement deals with the assets of a business. These can include property, contracts, equipment and resources. Purchasing the assets of a company does not give you control over that company.
A share purchase agreement deals with the sale of shares in a business. Depending on the proportion sold to the buyer this could be a controlling stake or the entire business. The buyer would also be entitled to a share of the profits of the business.
When should I use a business purchase agreement?
Use this business purchase agreement template:
if you want to buy or sell the entire share capital in a company or buy or sell specific assets in a business
to set out the sale in a formal agreement
if you need to impose restrictions on the seller post-sale
for businesses located in England, Wales or Scotland
What is included in a business purchase agreement?
This business purchase agreement covers:
details of the buyer and seller
specifications of the assets or shares
the completion date of the acquirement
warranties, representations and limitations on liability
Do I need a business purchase agreement?
You may need this type of agreement if you:
- wish to sell assets or shares in your business
- are completing a merger and/or acquisition
- want to purchase a business or certain assets of a business