Share purchase agreement (SPA) meaning

This Checklist sets out the key points to consider when advising a prospective claimant on a potential breach of warranty claim arising from a share purchase agreement (SPA). The same broad approach will apply to an asset purchase agreement (APA). For additional guidance on breach of warranty claims, see the related content links on the right-hand side. Read this Checklist together with Practice Note: Starting an SPA breach of warranty claim—a practical guide... Action Comments Review the SPA Check the: governing/choice of law provisions — is the agreement governed by English law? jurisdiction provisions — do the English courts have jurisdiction? warranty provisions and warranty limitation provisions — does the issue fall within the warranties and are you within the time limit to bring a breach of warranty claim? Note all deadlines in the agreement that could be relevant to any potential warranty claim... Review the disclosure letter Confirm that the issue has not been disclosed against...

This checklist functions as a reference, highlighting considerations for buyer’s solicitors when drafting a share purchase agreement (also referred to as an SPA or share sale agreement) that records the sale and purchase of the entire issued share capital of a private limited company, where the transaction features split exchange as well as completion...

This checklist has been prepared for the buyer and is intended to spotlight common issues and the key questions to address when conducting due diligence in a share purchase where the seller is a limited liability company. It concentrates on the IP assets and rights aspects of the deal and should be used alongside due diligence in other areas, such as IT and financial position. For corporate aspects of these transactions, see Share purchase agreement-overview. For further information, see: Practice Note: IP issues to consider in share purchase contracts Information technology due diligence in share purchase transactions-checklist Practice Note: IP due diligence for software companies Practice Note: Corporate transactions for technology lawyers Share purchase transactions-IP issues-checklist For example agreements, see Precedent: IP due diligence questionnaire. Completion process Be clear on how the sale will progress from offer to completion. For example: confidentiality agreement heads of terms (subject to financial, commercial, legal and IP/IT (and...

In this issue Company, disclosures, records and registers Equity capital markets Share purchase agreement Restructuring and insolvency for corporate lawyers Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Company, disclosures, records and registers Companies House publishes guidance on ACSPs and identity verification standards Companies House has issued three pieces of guidance covering the registration of Authorised Corporate Service Providers (ACSPs), what ACSPs do, and the identity verification obligations. The first note explains how to use Companies House’s service to enrol as an ACSP (also referred to as a Companies House authorised agent). Applications open on 25 February 2025. The second clarifies the functions and responsibilities of an ACSP. The third sets out how to meet Companies House identity verification standards when confirming someone’s identity. From 25 March 2025, ACSPs will be able to notify Companies House of identity checks that have been completed. Further, from spring...

In this issue: Audit Directors and company secretaries Nature of membership Share purchase agreement Corporate governance Equity capital markets EU developments Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Audit FRC introduces revised approach to audit supervision The Financial Reporting Council (FRC) has set out an updated model for supervising audits, aimed at supporting a high quality, resilient and trusted UK audit market and profession, and has also issued a policy statement explaining how the new regime will function. This represents a development of the FRC’s supervisory framework. The FRC states the approach is designed to deliver a more proportionate, effective and integrated system of oversight, reflecting shifts in the audit market and the wider ecosystem. See: LNB News 25/03/2026 51. Directors and company secretaries Gardner Aerospace Holdings Ltd v Upton [2026] EWHC 555 (Ch) The High Court found that...

X and YCo v ZCo [2024] HKCFI 695 What are the practical implications of this case? The tribunal is not obliged to trawl through all documents and materials to locate the issues; it is for the parties to identify the key questions put to the tribunal for decision. The Hong Kong Courts will give short shrift to parties attempting to overturn awards on matters not addressed in opening and closing submissions for the hearing. Where a list of issues is agreed, parties must ensure every critical point is included, as it is the court’s ‘useful starting point’ when determining what issues were before the tribunal. What was the background? The plaintiffs entered into a Share Subscription and Purchase Agreement (SPA) under which ZCo purchased shares in the company from the second plaintiff (YCo). Upon completion of the SPA, ZCo held 65% of the company’s shares, with YCo retaining the remaining 35%...

Training materials These training materials are made up of template PowerPoint slides that can serve as the foundation for one or more training seminars concerned with negotiating a share purchase agreement (SPA). They are intended to assist junior lawyers, company secretaries and directors in developing an understanding of the principal points of negotiation and drafting, and they also signpost other useful materials and guidance. It is expected that those delivering training will use these slides as a practical starting point for their presentations, and then adapt them as necessary to reflect their particular circumstances...

This Practice Note is part of the Share purchase transaction collection. To implement every element of the deal, each share purchase will necessitate the preparation of certain ancillary documents (some of which will call for more negotiation than others). These supporting papers will either be produced by the corporate solicitor preparing the share purchase agreement (SPA), or by a more junior team member. Some will be executed on exchange and others on completion (depending on whether those milestones occur at the same time). Ancillary documents include: loan note instrument (where a portion of the consideration is to be met by the buyer issuing loan notes) board minutes (the buyer, seller and target company must hold board meetings to approve various matters at completion, with the buyer and seller also holding board meetings at exchange to authorise entry into the SPA) resolution of the members of the buyer (where the buyer’s articles require a members’ resolution to approve the terms of the proposed transaction) ...

This Practice Note forms part of the share purchase transaction collection. Timing Work on an initial draft of the share purchase agreement (SPA) may start as soon as the principal commercial terms are settled and the heads of terms executed. The due diligence and disclosure workstreams proceed in parallel with SPA drafting and negotiation. The sooner the buyer undertakes substantive due diligence, the earlier its findings can shape discussions on suitable warranty and indemnity protection within the SPA. In most cases, the buyer’s lawyers produce the opening draft and forward it to the seller’s lawyers for mark-up. Drafts will move back and forth until exchange (signing of the SPA), which will take place ahead of completion where there are conditions to completion, or at the same time as completion where there are none. The tax covenant is usually included as a schedule to the SPA, although it is drafted and negotiated by tax lawyers for both buyer and seller. Work on the tax covenant typically begins once a...

Date provision Substitute the date clause in the share purchase agreement (SPA) with the following updated wording to read: This Agreement is delivered on [ insert day and month ] 20[ insert year ] Recitals Recital (B) Remove ‘legal and beneficial’ from Recital (B) entirely. Definitions Revise the following existing definitions set out in clause 1 (Definitions and interpretation) of the relevant precedent SPA (where used in the SPA): Definition of ‘Business’ Replace ‘the City of London’ with ‘[ Edinburgh OR Glasgow OR Aberdeen ]’ instead. Definition of ‘CRTP’ Replace the definition of ‘CRTP’ with the following new definition: CTPRS means Contract (Third Party Rights) (Scotland) Act 2017; Definition of ‘Encumbrance’ Delete ‘assignment’ immediately preceding ‘right of first refusal’, as Scots law uses assignation rather than assignment. Delete ‘legal or equitable’ immediately preceding ‘third party right’, as Scots law does not recognise this separation of ownership...

Board minutes—private M&A—share purchase—exchange—buyer Company no: [insert company number]. [insert company name] [Limited OR plc]. Board meeting at [insert place] on [insert date] at [insert time]. [insert name] chaired, confirmed due notice and quorum. Business: to consider and, if appropriate, approve documents and matters for the Company’s proposed purchase of the entire issued share capital of [insert target name] Limited from [insert seller name] [Limited OR PLC], subject to conditions, including any required shareholders’ approval. Directors declared interests per CA 2006 and the Articles; quorum and voting confirmed. Key documents tabled included the draft sale and purchase agreement, any loan note instrument, disclosure letter, stock transfer form(s), voting power of attorney, circular and proxy (if relevant), verification notes and responsibility documents, consents, irrevocable undertakings, announcement and ancillary papers. The board noted conditions precedent and long‑stop; consideration (cash, loan notes and/or consideration shares); warranties/indemnities with time limits, caps and thresholds, subject to disclosures; post‑completion non‑compete/non‑solicit; and key loan note terms (interest, redemption, guarantee/security, convertibility). RESOLVED...

[ On the Investor’s letterhead ] Strictly confidential and private To: The Shareholders of [ insert target name ] [ insert address ] ( Sellers ) From: [ insert Investor name ] of [ insert address ] in its role as manager of [ insert Fund names ] (respectively, Investor and Equity Investors ) Date: [ insert date ] Dear Sellers, Sale of [ insert name and registered number of company ] (Company) 1 We write in relation to the acquisition of the entire issued share capital of the Company by [ insert name of newco ] Limited ( Buyer ), under a sale and purchase agreement between the Sellers and the Buyer to be executed on the date of this letter ( SPA ). Unless stated otherwise, the terms used in this letter carry the meanings assigned to them in the SPA...