Share Purchase Agreement As A Deed

A share purchase agreement (SPA) is the main contract used for a private sale of shares. In the case of a sale of shares between two parties, a spa project is usually established by the buyer`s legal representatives, as it is the buyer who is most concerned that the BSG protects them from debt after the sale. When a business is auctioned, the seller`s lawyers usually prepare a proposed share purchase contract and make it available to interested bidders for consideration. After negotiating the terms of the OSG and the due diligence process, the parties each sign the SPA, the buyer pays the purchase price and the shares are formally transferred to the buyer via a transfer form. Generally, this takes place on the same day. When a shareholder acquires shares, the shareholder increases his equity in the company. When a shareholder grants a shareholder loan to the company, it is a personal debt that the company owes to the shareholder, as if both were individuals. The debt must be repaid, but it does not increase the company`s equity. Since the sale of shares is subject to the general rule of “careful buyers,” the law does not offer much protection to the buyer if unexpected debts or problems are brought to light after the sale of the business. In order to protect the buyer from such unforeseen costs, a DSG contains extensive guarantees from the seller, in which it provides statements and commitments on the state of the business and assets of the business, and possibly compensation in favour of the buyer allowing him to recover any losses incurred by the seller. A tax notice provides for situations in which the seller`s liability for the company`s underpaid tax may be triggered, for example.B. in the event of a tax check with the company that covers certain taxes or tax matters or a challenge to the amount of tax not paid by a tax authority or the refusal of a tax authority to grant a refund of VAT to the company. Etc.

When a SPA is accompanied by a tax deed, it is clearly indicated, in the event of a particular event, how it should be managed and how parties should cooperate when a tax dispute arises with the tax authorities, for example. B which of the parties will settle the dispute. The other issues agreed in a tax deed may be to keep the other party informed of the status of any case that may influence its financial accounts related to tax guarantees, provisions relating to the acquisition and counting of the costs of these cases, or formal appeal decisions. In addition, the parties may decide to include a compensation clause in a tax notice and not the associated GSB.