A share purchase agreement is defined as a legal contract between a seller and a buyer. They can be called sellers and buyers in the contract. The specific number of shares is shown in the contract at the stated price. This agreement proves that the sale and the terms of the sale were agreed upon by mutual agreement. If you would like more information about the share purchase agreement, please contact us. In another example, a GSB is often required in a transaction in which one company buys another. Because the G.S.O. defines the exact nature of what is purchased and sold, the contract may allow a company to sell its tangible assets to a buyer without selling the naming rights attached to the transaction. This is because the parties sometimes feel it is appropriate to submit the final conclusion of the purchase transaction to a number of conditions that must be met within a specified time frame. For example, obtaining prior administrative authorization necessary for the transfer, the favourable resolution of a dispute in which the company to be acquired is currently involved, etc. This is why signing is a „promise to purchase“ that is subject to a number of requirements. The buyer follows in the seller`s footsteps as a shareholder or director, but the employees, contracts, real estate, etc. of the company remain the property of the company.
The transfer of the company`s assets is therefore not necessary, so a sale of shares can often be completed without the participation of third parties. The purchase of shares is therefore often much more discreet than a purchase of assets. Once due diligence is completed satisfactorily, the share purchase agreement is usually signed in a private document (in legal jargon, this phase is called „signing“). However, as a general rule, the transaction does not take place; In other words, there is no actual transfer of ownership of the shares to the buyer. Financial statements are the date on which both parties would effectively discharge their key obligations (delivery of the property and payment of the agreed price) when the agreed terms are met, so that the financial statements are made, i.e. the conclusion of the transaction with the subsequent transfer of the shares. Since the buyer inherits a business, buying shares generally carries a much greater risk than buying assets. This justifies the inclusion of necessary safeguards to protect the buyer. It should be noted that it is possible that a signature and closure will take place in the same action and not at different times. However, in practice, these cases are reduced to simple, low-complexity business purchases, regardless of a pre-acquisition condition or factor.
As soon as the terms of the agreement are met, the contract will have full legal effects. On that date, it is customary for the parties to the agreement, buyers and sellers, to appear before a notary to confirm their agreement and to continue the payment of the sale price and the delivery of the shares taking into account the ownership of the fully transmitted shares (the „final phase“).