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Stock Purchase Agreement



A stock purchase agreement is a contract for the sale of stock from one person or business to another.

Uses

  • Purchasing equity shares in a company
  • Selling equity shares in a company

Overview

A stock purchase agreement can be used whenever the owner of shares of stock agrees to sell his or her shares to a buyer. This type of agreement is more common in small, closely-held corporations. Equity is commonly bought and sold through private sales of stock. These transactions may take place between family members of a family run business or founders of a closely held corporation. Business owners also commonly offer sales of stock to investors in exchange for capital. In these situations, founders typically agree to sell a portion of their companies in exchange for start-up money. The investors put up cash, and they are entitled to a share of the profits if the business takes off.

Stock purchase agreements can be helpful to people buying and selling equity shares in corporations. The stock purchase agreement clearly lays out a framework for the transaction, including the number and type of stock sold, the price of the shares, the parties involved in the transaction, and when the exchange took place. Use this helpful template to create a personalized stock purchase agreement that you can use to document the purchase or sale of equity shares in a company. However, because both federal and state securities laws may impact your sale of stock, be sure to consult an attorney before executing this type of agreement.