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A Share Purchase Agreement lays out the terms and conditions when someone buys shares in a Canadian company. It's the key legal contract between a share seller and buyer, spelling out exactly what's being sold, at what price, and under what conditions the deal will close.

Beyond just stating the price and number of shares, these agreements protect both parties by including important details like representations and warranties, conditions for closing, and what happens if something goes wrong. Under Canadian securities law, they're especially crucial for private company transactions and must comply with provincial and federal regulations around share transfers.

Use a Share Purchase Agreement when buying or selling shares in a Canadian private company. This contract becomes essential during business acquisitions, ownership transfers between shareholders, or when bringing in new investors through private placement deals.

The agreement proves particularly important for transactions involving significant share blocks, complex payment terms, or when specific conditions must be met before closing. Companies dealing with regulated industries, family business succession, or cross-border share transfers need these agreements to ensure compliance with Canadian securities laws and protect all parties' interests throughout the transfer process.

• Business Share Sale Agreement: Used for complete or substantial business ownership transfers, including comprehensive warranties and operational handover terms
• Asset For Share Agreement: Specifically for transactions where company assets are exchanged for shares, common in corporate restructuring
• Agreement To Sell Shares: Simpler version for straightforward share transfers between existing shareholders
• Common Stock Subscription Agreement: Designed for new share issuances to investors, focusing on subscription terms and investor rights

• Shareholders (Sellers): Current owners looking to transfer their company shares, including majority shareholders, minority investors, or family business owners
• Buyers: Individuals, companies, or investment groups purchasing shares, from strategic corporate acquirers to private equity firms
• Corporate Lawyers: Draft and review agreements to ensure compliance with Canadian securities laws and protect client interests
• Company Directors: Often required to approve share transfers and ensure alignment with corporate bylaws
• Professional Advisors: Accountants, tax specialists, and business valuators who support due diligence and transaction structuring

• Company Details: Gather accurate legal names, registration numbers, and addresses of all parties involved in the share transfer
• Share Information: Document the exact number, class, and price of shares being transferred, plus any existing shareholder rights or restrictions
• Due Diligence: Review company bylaws, existing shareholder agreements, and corporate records to confirm transfer requirements
• Payment Terms: Define the purchase price, payment schedule, and any escrow arrangements or earn-out provisions
• Closing Conditions: List required approvals, regulatory clearances, and specific milestones that must be met before finalizing

• Parties and Recitals: Full legal names, addresses, and roles of all parties involved in the share transfer
• Share Details: Precise description of shares being sold, including class, quantity, and certificate numbers
• Purchase Price: Clear statement of consideration, payment terms, and any adjustments or earn-out provisions
• Representations & Warranties: Statements about company status, share ownership, and absence of encumbrances
• Closing Conditions: Required approvals, documentation, and steps for completing the transfer
• Governing Law: Specification of applicable Canadian jurisdiction and dispute resolution procedures

A Share Purchase Agreement differs significantly from a Shareholder Agreement in both timing and purpose. While both documents deal with company ownership, they serve distinct functions in Canadian corporate law.

• Transaction vs. Governance: Share Purchase Agreements handle one-time share transfers between buyers and sellers, while Shareholder Agreements govern ongoing relationships between all shareholders
• Timing of Use: Purchase agreements expire after the sale completes, but Shareholder Agreements remain active throughout the ownership period
• Legal Focus: Purchase agreements concentrate on sale terms, warranties, and closing conditions; Shareholder Agreements cover voting rights, share transfers, and company management
• Party Scope: Purchase agreements involve only the buyer and seller, while Shareholder Agreements typically bind all company shareholders