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Stock Purchase Agreement Template
What Is a Stock Purchase Agreement?
A Stock Purchase Agreement is a legal contract that is signed between a buyer and a seller (or a purchaser and a shareholder), in which the seller is legally bound to sell a share of a company on conditions stated in the contract, and the buyer is legally bound to buy that share on the same conditions. The purpose of the document is to regulate the whole process of purchasing and summarize all of the essential details of it.
Some agreements allow company founders to document their initial ownership of it with the use of vesting provisions and transfer restrictions, that regulate the company's repurchase option (when the company can repurchase the unvested shares - the shares that were not earned by providing services to the company). This type of agreement is signed between a company and a purchaser, mostly used with startups, and is called a "Founder Stock Purchase Agreement" or a "Common Stock Purchase Agreement."
A printable Stock Purchase Agreement can be downloaded below or you can make your own document using our online form builder.
How to Write a Stock Purchase Agreement?
A Stock Purchase Agreement should consist of several parts, including:
- Introduction . The document should start with a title. It can be followed by information about the parties, such as their names and addresses, and the date when the contract was signed.
- Interpretations . This part of the contract is supposed to provide the definitions of any major terms used in this agreement.
- The Subject . Here the involved parties can state all of the important aspects of the deal, which may contain the description of the share that is being purchased, the purchase price, how it will be transferred, etc.
- The Closing . Parties may use this section of the agreement to designate all of the obligations that must be fulfilled at the closing of the deal. Usually, it is presented as lists of documents that a buyer and a seller must provide.
- Representations and Warranties . In this part of the document, the seller and the buyer provide all of the statements that they are signing off on to be true and valid.
- Rights and Responsibilities . All the rights and responsibilities that the involved parties have should be stated here. For example, this part can contain the responsibility of the buyer to transfer the purchase payment in time and in accordance with the contract.
- Fees and Expenses . The contract should contain a clause that provides information on which party will cover the expenses connected with the deal, or how they will be shared between the involved parties.
- Notices . The seller and the buyer should provide their correspondence address, telephone number, and email for notification purposes. If they want their representatives to be in contact, they can state it here and provide their contact information as well.
- Governing Law . Parties should designate the state law in accordance with which this agreement should be governed by and construed.
- Signatures . To state that they are entering the agreement under their own free will and to express the consent with everything written there, the parties should sign the Stock Purchase Agreement.
The parties can include other statements in the contract that they have agreed on, such as a non-competition and non-solicitation clause, severability, representatives, jurisdiction, tax matters, contract termination, etc.
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