The stock purchase agreement is a document that outlines the contract between investor and company. Both parties sign this agreement in the purpose of certifying the partial ownership or stock transfer. Usually, small corporations often do this to gain funding and strive more. However, it doesn’t mean the more prominent companies don’t do this. They do this when they want to expand further. If you want to know how this document was written, you can learn from the stock purchase agreement sample templates. It is free!
What Are The Elements Of Stock Purchase Agreement Template Free?
Our templates are designed professionally that you can edit and customise it. There are several essential elements that we include, which will help you write the agreement systematically, which are:
- The company’s name – The name of the business should be stated clearly, and you need to write the legal name of the business. In this agreement, the company acts as the “seller” because they are the ones who sell the shares.
- Purchaser’s name – Note that the party that will buy the shares can be the investor or another company. In this case, the buyer of the shares will act as the “purchaser”.
- Share details – The agreement should also state the value of the share. The state even the number of sold shares and mention it.
- Transaction time and also a place – The document also should explain the transaction details which states the specific date, a place where the transaction is done etc.
- Warranties and representations – The meaning of representation here is the statements of the shares that are sold, and warranty is the security for the purchase.
How To Write A Stock Purchase Agreement
Besides using our stock purchase agreement sample templates, there are several vital aspects that you have to pay attention to:
- Details of the transaction – This section talks about the specific terms which mention the seller is transferring the shares to the buyer. The features should also include the price, shares sold, price adjustments, and so on. The details refer to the clear outline of the transaction.
- Warranties and representations – Every stock purchase agreement should declare the stock conditions. It is about the company financial, so the buyer can consider it well and also they will have specific strategies regarding the money.
- Covenants – Besides, it is also essential to write down the prohibition during a specific period when the negotiation is still ongoing.
- Closing conditions- This indicates the terms and conditions of both parties before they close the deal.
- Termination – State the separation in the agreement. Such a thing might happen due to several things which can end the contract.
Another quick tip that you have to follow are presenting the letter of intent. This letter will explain to the buyer why the stock is sold. Discuss these terms with the buyer so you can have win-win terms and conditions. Therefore, before you go on paper, it is very wise to do this.