The seller wishes to sell the stock to the buyer, as described below, and the buyer agrees to acquire the stock from the seller under the following conditions. A share purchase agreement (SPA), also known as a share purchase agreement, is a contract signed by both the company (or the shareholders of a company) and the purchasers of the stock. This agreement protects both the company and the buyers. The agreement itself defines the sale of shares in a company and what is acquired. In the absence of a written contract, the terms of sale and ownership would not be governed by a legally binding agreement. This could put you at risk of shares in your company being bought out by outsiders. It can also open you up to litigation, as there is no defined resolution clause. BUY AND SELL. Subject to the terms of this share purchase agreement, the seller agrees to sell to the buyer and the buyer agrees to acquire from the seller ,NUMBER] [TYPE] shares of the company (the “shares”). Restricted share purchase contracts provide the company with the opportunity to better protect its assets. When stock options are offered to attract talented employees, this type of agreement provides an additional incentive for employee loyalty. With this agreement, a vesting schedule is linked to the transfer of ownership of shares.

A standard vesting schedule can be four years, which means you don`t own the stock before running the vesting calendar. Stocks are heavily regulated by the federal government and municipalities. It is important that the share purchase agreement complies with all the rules and laws applicable to the sale of shares. If part of the agreement violates state or federal laws, it can cancel the agreement. It is also important that all sections are objective. If the presentation of the business or the value of the action is considered false or fraudulent, it would also nullify the agreement. For example: a company has a four-year blocking plan. An employee decides to resign after two years of employment. The company has the right to buy back the stock from the employee. This encourages employees to stay for a set period of time and also gives them an interest in the company`s success.

The more successful the company, the more its shares increase. The reality is that if you sell shares in your company, there is no scenario in which it is a good idea not to create a share purchase contract. A share purchase agreement is a contract that allows companies to record the sale and purchase of shares of companies between a buyer and a seller. There is no scenario in which the sale of shares would be wise without this agreement.