The contract for the purchase and sale of shares (parts) of the company: mandatory and recommended conditions. Buying a company with debt

This document is an agreement for the sale of shares of the company and regulates the terms of the agreement between the seller and the buyer. The following are mandatory and recommended terms and conditions that should be considered when using this agreement.

Mandatory conditions:

1. Identification of the parties: Provide the full legal name of the seller and the buyer's details, including their addresses and contact information.

2. Subject of the transaction: Describe the shares being sold, including their number and par value.

3. Price and form of payment: Specify the amount for which the shares are sold and the terms of payment. If the price is governed by any circumstances, specify those circumstances.

4. Deadlines : Specify the date when the calculations should be made and the shares transferred.

5. Warranties and Obligations of the Parties: Include a section describing the warranties and obligations of the parties to the agreement, including their rights and authorities, and compliance with all laws.

6. Confidentiality : Specify the obligation of the parties to keep confidential the information received during the agreement.

7. Legal consequences in case of violation : Specify what measures can be taken if one of the parties does not fulfill its obligations.

Recommended conditions:

1. Notification of the agreement: Add a section requiring the parties to notify the appropriate authorities of the agreement if required by law.

2. Changes to terms: Specify the procedure and conditions for making changes to the agreement, if necessary.

3. Disputes: Specify procedures for resolving disputes, for example through arbitration.

4. Governing Law: State which law will apply to the agreement and the jurisdiction to resolve disputes.

5. Notification: Establish notification requirements between the parties.

6. Certification: Include certification that both representatives have the authority to sign the agreement on behalf of their respective companies.

7. Language of the agreement: Specify the language in which the agreement will be drawn up.

8. Integrity of Agreement : State that this document is the final agreement between the parties and supersedes all prior agreements.

This document is an important agreement governing the purchase and sale of company shares, and its drafting and discussion by a lawyer is essential to protect the interests of both parties. It is also important to comply with local legal requirements and regulations in your jurisdiction.

Sometimes it happens that the company, which is the object of sale, has a debt to one of the previous founders or third parties. In this case, the amount of outstanding debt can be included in the value of corporate rights. However, you need to take into account the tax consequences, that is, when the debt is forgiven, there is an income tax, which in most jurisdictions will be about 20%. Debt forgiveness must be formalized by an additional agreement to the loan agreement or a separate transaction. The following template of the contract for the purchase and sale of corporate rights precisely and calculates the peculiarity of the purchase and sale of an enterprise that has debt:

The contract for the purchase and sale of shares is simple, the loan is included in the price, the transfer of the share after payment, without the pledge of shares, universal English

Templates that may interest you

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What to read?

Corporate contract: main features + contract template

Purchase and sale of corporate rights by prior agreement + template of the preliminary contract for the purchase and sale of corporate rights (shares in the authorized capital of the LLC)

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