Jurisdiction(s):
United Kingdom

Key definition

Share purchase definition

What does Share purchase mean? A share purchase is the acquisition of shares in a target company—typically all, or a controlling stake—so the buyer becomes the shareholder exercising control while the company continues to own its business. Because the company remains the legal owner of its assets and bearer of its obligations, the buyer effectively inherits the company with all assets, contracts and liabilities (including unknown or contingent liabilities), managed through due diligence, warranties, indemnities and price adjustments. Used across private M&A, it is usually documented by a share purchase agreement (SPA) and completed by share transfers and corporate approvals, with any required...

Ancillary documents in private share purchases: drafting, negotiation and precedents for loan notes, board minutes and members' resolutions, guarantees, retention arrangements and deeds of contribution

Published by a LexisNexis Corporate expert

Practice notes

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)
guarantee (where the buyer requires a guarantor to guarantee the seller’s obligations under the SPA and it is agreed that this guarantee will be provided)...

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Web page updated on 21/05/2026

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