Share Purchase Agreement (SPA)
Acquire or sell equity in a private company with a robust SPA covering reps, warranties, and indemnities
The questions founders ask most about share purchase agreement (spa), answered plainly. If something here doesn't cover your situation, our team will walk you through it before you commit.
Frequently Asked Questions
What is a representation and warranty?
A representation is a statement of fact made by the seller about the company. A warranty is a contractual promise that the statement is true. If a warranty is false, the buyer has a claim for breach.
What is a warranty disclosure letter?
The seller discloses known exceptions to the warranties in a disclosure letter. A disclosed matter cannot be the basis of a warranty claim.
How is a share transfer completed in India?
The seller executes a share transfer form (Form SH-4), the buyer pays the consideration, and the board approves the transfer. The company updates its register of members and issues a new share certificate.
Is stamp duty payable on the share transfer form?
Yes. Form SH-4 attracts stamp duty at 0.015% of the market value of shares being transferred under the Indian Stamp Act.
What is a condition precedent?
A condition that must happen before the parties are obliged to complete — for example, shareholder approval or regulatory consent. If not met by the long-stop date, either party can terminate.
Can a SPA be structured as a deferred consideration deal?
Yes. Common structures include earn-out (portion of price contingent on future performance), deferred payment tranches, and escrow held back against warranty claims.
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Share Purchase Agreement (SPA)
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