Stock Purchase Agreements

Stock purchase agreements are a common method of buying a company. Through a stock purchase agreement, a new company or individual can become a majority or total shareholder. While this is a conventional method of business acquisition, stock purchase agreements are extremely complex transactions and any party involved in a stock purchase agreement should have the representation and advice of an experienced attorney.

There are several benefits to using a stock purchase agreement to gain control of a company. Most notably, a stock purchase agreement keeps intact the legal entity of the business that is being bought. This means that major elements of the business are preserved. Such elements include supply agreements, partnerships, assets and contracts. Another method of acquisition is the use of an asset purchase agreement. Under this contract, the acquiring company buys only the assets of the other company.

Our attorneys will be able to advise you on which type of agreement is most beneficial in your case. Liability, tax implications, and logistics are all factors that will weigh on this decision.

A stock purchase contract will detail how many shares will be bought and what type of control the purchaser gains from the sale. While every case is different, a stock purchase agreement will usually include the following provisions:

• Sale execution. The agreement must address how the share transfer will occur and the number of shares that will be transferred, as well as other issues related to the execution of the sale.
• Assumption of liabilities. This section of stock purchase agreement details the way that any of the liabilities of the target business will be allocated among the parties.
• The purchase price. The price of the stock must be specified.
• Warranties and representations. These provisions cover the veracity of representations made about the business in tax documents and financial statements. This section of the contract will also detail significant contracts, company-owned property, potential legal claims, accounts receivable and employee benefits matters.
• Closing Conditions – The agreement should set out certain conditions that must be met before the transaction can be closed.

Stock purchase agreements also typically include provisions on contract termination.

Our skilled corporate lawyers draft and review stock purchase agreements for clients who are buying and selling businesses. With our client-based approach, your stock purchase agreements will be tailored to your situation.

Kilo Flynn’s attorneys have represented clients in stock purchase agreements throughout Missouri and Illinois. To schedule a consultation with one of our lawyers, call Kilo Flynn today at xxx-xxx-xxxx or contact us online.