Share Purchase Agreements

Our commercial property solicitors specialise in handling all aspects of share purchase agreements (SPAs). Whether you require expert advice, a solicitor to draft a share purchase agreement or seek assistance negotiating the terms, our experienced team can assist. We can represent either buyers or sellers in commercial property transactions.

For a free quote, please call us at 0191 567 7244. Alternatively, you can contact us via email at info@cooklaw.co.uk or complete our free online enquiry form, and we will contact you.

What is a share purchase agreement?

A share purchase agreement is a legally binding document that outlines the terms and conditions for selling a company’s shares.

The share purchase agreement should clearly communicate what is being sold, to whom and for how much. It should also include any other obligations and liabilities.

Whether a share purchase agreement involves selling all or a portion of the shares, the result is the transfer of total or partial control to a new owner.

Share purchase agreement vs asset purchase agreement

In business transactions, parties can opt for either a share purchase or an asset purchase. While a share purchase involves acquiring a company’s shares, an asset purchase encompasses tangible and intangible assets.

We handle both asset purchase agreements and share purchase agreements, each with its distinct benefits and limitations. While an asset purchase allows greater control over the sale’s inclusions, it may incur additional tax liabilities and might not include the transfer of third-party contracts. On the other hand, a share purchase ensures business continuity but may require approval from each selling shareholder.

There is no universal approach to acquiring a business; it depends on the circumstances. Our commercial property solicitors provide tailored advice to guide you through the decision-making process.

Is a share purchase agreement legally binding?

Yes, a share purchase agreement becomes legally binding once signed by both parties. Before signing, there is a negotiation period to ensure fair distribution of risk. Due diligence is crucial, especially for the buyer, to identify and address potential issues.

Warranties and indemnities, significant components of the agreement, protect the buyer from unexpected costs post-sale. At this stage, it is important to review the company’s accounts to ensure that what you are told verbally is, in fact, accurate and a true reflection of the company you are purchasing.

What should a share purchase agreement include?

Key provisions in a share purchase agreement include:

• Agreement to sell and purchase shares
• Price and payment terms
• How and when the purchase price is to be paid
• Share Sale conditions
• Need for regulatory or third-party approvals
• Arrangements for completion
• Indemnities
• Restrictive covenants
• Matters relating to employees (if applicable)
• Confidentiality clauses
• Any other niche clauses that the transaction may require and are agreed

There is no ‘one size fits all’ approach to share purchase agreements, which is why share purchase agreement templates are not recommended. Even just the matter of how the buyer will purchase the shares can require much deliberation. Will payment be made in cash? Does the buyer want to issue loan notes or other shares? Is the final sale price flexible and dependent on the company’s performance (known as an earn-out clause)?

There are many other factors to consider, each requiring specialist input.

Who prepares the share purchase agreement?

The buyer’s solicitor prepares the initial share purchase agreement. The seller’s solicitor revises and advises their client on the terms and conditions. Both parties then negotiate until a final agreement is reached.

How can we help you?

Our commercial property solicitors can represent both buyers and sellers entering into share purchase agreements. Operating on a fixed fee basis, we begin with a free initial consultation and then provide a transparent fixed-fee quote with no hidden charges.

We can guide you through the advantages and disadvantages of asset and share purchases. If you choose a share purchase agreement, we can draft the document on your behalf.

Our thorough due diligence checks allow us to advise on tax liabilities, potential risks, and compliance issues. Our solicitors can then negotiate terms and conditions with the other party to reach an agreement safeguarding your best interests.

Get a free quote

Call 0191 567 7244 for a free, no-obligation quote from our commercial conveyancing solicitors. We are here to assist you.​

Alternatively, you can email us at info@cooklaw.co.uk or complete our free online enquiry form, and we will contact you shortly.