Share Purchase Agreements

If you are thinking about investing in a private company or acquiring the whole of its share capital to secure the outright purchase of the company’s business, then it pays to speak to a specialists law firm. They can work with you to ensure that the terms of the proposed deal are fair and that they are recorded in a properly constituted share purchase agreement that adequately protects your interests.

This is something the commercial solutions lawyers at IMD Corporate do every day, working for a range of clients including entrepreneurs, private investigators, equity funds, business start-ups and management teams looking to secure a management buyout.

Our service is responsive and fast and can normally be delivered for a fixed fee.

What points should a share purchase agreement cover?

Aside from the price you are prepared to pay, the key points to consider when negotiating the terms and conditions of a share purchase agreement include:

• any statements or representations you have relied on in making the decision to proceed and which should therefore be included within the agreement as warranties so you can hold the seller to account if they turn out out be false, including those relating to ownership of intellectual property rights;
• any known liabilities or risk areas in the business which you and the seller have agreed the seller ought to bear responsibility for and which therefore need to be covered off under an indemnity;
• how the purchase price will be paid and whether any part of it should be deferred or made conditional upon the happening of a certain event;
• whether there any tax considerations which mean that the deal needs to be arranged in a particular way or that any company or corporate restructuring is required;
• whether the seller ought to be obliged to continue their involvement in the company for a set period to ensure an orderly handover; and
• whether the seller ought to be subject to any time-limited restrictions to prevent them from leaving the company and then immediately going to work for a rival or setting up in competition.

How IMD Solicitors can help

Working alongside you from the moment the sale is agreed, our lawyers can help you to:

• negotiate the terms on which the deal should be done;
• review disclosures made by the seller regarding the state of the company’s affairs;
• carry out pre-contract enquiries and legal due dilligence so you are clear on what you are buying and any risks that need to be considered;
• assist you in reviewing the seller’s draft of the agreement and in negotiating amendments and additions necessary to meet your needs; and
• identify any company documents that need changing as a result of your acquisition, including a shareholders’ agreement where one exists.