If you`re looking to buy or sell shares of a company in Ireland, it`s important to have a share purchase agreement in place. This legally binding document outlines the terms of the sale and helps protect both the buyer and the seller. In this article, we`ll take a closer look at what a share purchase agreement is, why it`s important, and some key provisions you should consider including.
What is a share purchase agreement?
A share purchase agreement (SPA) is a legal contract between a buyer and a seller that outlines the terms of the sale of shares in a company. It includes details such as the purchase price, the number of shares being sold, any conditions of the sale, and representations and warranties made by the seller.
Why is a share purchase agreement important?
A share purchase agreement is important because it protects both the buyer and the seller. For the buyer, it ensures that they are buying the shares as described and that there are no hidden surprises. For the seller, it protects them from any post-sale claims from the buyer.
What should be included in a share purchase agreement?
While the specific provisions of a share purchase agreement will vary depending on the transaction, there are some key provisions that should be considered. These include:
1. Purchase Price – The price at which the shares are being sold should be clearly stated.
2. Payment Terms – How and when the purchase price will be paid should be included.
3. Representations and Warranties – The seller should make certain representations and warranties about the company being sold. For example, they may warrant that the company is in good standing, has all necessary licenses and permits, and is not involved in any litigation.
4. Conditions of Sale – The agreement should outline any conditions that must be met before the sale can be completed. For example, the buyer may require certain approvals or the seller may require payment in full before transferring the shares.
5. Indemnification – The agreement should include provisions for indemnification, which means that the seller will be financially responsible for any damages or losses that arise as a result of a breach of the representations and warranties.
In conclusion, a share purchase agreement is an important document for any buyer or seller of shares in a company in Ireland. It outlines the terms of the sale and protects both parties from any post-sale claims or disputes. While the specific provisions will vary depending on the transaction, including key provisions such as the purchase price, payment terms, representations and warranties, conditions of sale, and indemnification will help ensure a smooth and successful transaction.