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Share Purchase Agreement for the United Kingdom

Share Purchase Agreement Template for England and Wales

A Share Purchase Agreement under English and Welsh law is a legally binding contract that documents the sale and purchase of shares in a company. It sets out the terms and conditions of the transaction, including the purchase price, payment terms, warranties about the company's condition, and various protections for both buyer and seller. The agreement typically includes detailed provisions about completion mechanics, pre-completion obligations, and post-completion adjustments, all governed by the legal framework of England and Wales.

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What is a Share Purchase Agreement?

A Share Purchase Agreement is the primary transaction document used when acquiring or selling shares in a private company. It is essential for both share acquisitions and corporate restructurings under English and Welsh law. The agreement comprehensively details the transaction terms, including price, payment structure, warranties, indemnities, and conditions precedent. It protects both parties' interests by clearly defining their rights and obligations, and typically involves substantial due diligence and negotiation processes. This document is crucial for ensuring legal certainty and managing risk in share transfers.

What sections should be included in a Share Purchase Agreement?

1. Parties: Identification and details of the seller(s) and buyer(s)

2. Background/Recitals: Context of the transaction and high-level description of what is being sold

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Sale and Purchase: Core transaction terms including shares being sold and purchase price

5. Consideration: Details of purchase price, payment terms, and any adjustments

6. Completion: Mechanics of closing, including timing and deliverables

7. Warranties: Seller's representations about the company and shares

8. Limitations on Liability: Restrictions on warranty claims and general liability caps

9. Confidentiality: Obligations regarding transaction confidentiality

10. Governing Law and Jurisdiction: Choice of law and dispute resolution provisions

What sections are optional to include in a Share Purchase Agreement?

1. Pre-Completion Obligations: Conduct of business between signing and completion - used when there's a gap between signing and completion

2. Tax Covenant: Specific tax indemnities and arrangements - used for larger transactions or where tax risks identified

3. Non-Competition: Restrictions on seller's future activities - used when protecting goodwill of the business

4. Employee Provisions: Specific arrangements for key employees - used when employee matters are material to the deal

What schedules should be included in a Share Purchase Agreement?

1. Details of the Company: Corporate information including share capital structure

2. Warranties: Detailed warranties about the company and business

3. Properties: List and details of company properties

4. Intellectual Property: Schedule of IP rights owned or used

5. Material Contracts: List of key business agreements

6. Completion Obligations: Detailed list of completion deliverables

7. Employee Information: Details of key employees and their terms

8. Tax Covenant: Detailed tax indemnity provisions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Publisher

Ƶ

Sector

Personal

Cost

Free to use

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