What Does Stock Purchase Agreement

This presentation does not address the Corporation`s tax liability due to membership in transit corporations. A lawyer can make the appropriate changes to the language if necessary. 8.11. Entire Agreement. This Agreement (the term of which includes the Annexes and Annexes and other certificates, documents and instruments provided under this Agreement) constitutes the entire agreement of the Parties and supersedes all prior agreements, letters of intent and understandings, written and oral, between the Parties with respect to the subject matter of this Agreement. There are no representations or warranties, agreements or representations other than those expressly set forth in this Agreement. If the Company has subsidiaries, this submission will generally be revised to require the Company to include it in an attached disclosure plan. 4.3. Capital structure. The Company`s Authorized Share Capital consists exclusively of _____ There are no options, subscriptions, warrants, rights (preventive or otherwise), bonds or other agreements authorized or outstanding that require the Company to repurchase, issue or transfer common shares of the Company or securities that can be converted or exchanged for common shares of the Company. Examples: non-compete and non-solicitation obligations; written resignations of the directors and managers of the Company with immediate effect after closing; legal advice; promissory notes; Employment contracts.

In general, buying stocks is easier than buying assets. The parties sign the share purchase agreement and related documents describing the terms of the transaction, and the sellers transfer the shares of the target company to the buyer. Thus, the buyer assumes all the responsibilities of the target company. A stock purchase is ideal for a buyer who wants to buy a business that will operate in the foreseeable future without the risk of liquidation. However, there is also a risk that the buyer will assume unknown or disclosed liabilities of the target company (if any). In the event of an economic downturn, a buyer may prefer a share purchase to an asset purchase because the buyer`s base in the acquired assets cannot exceed the fair value of the acquired assets. In other words, if a buyer buys assets from a seller whose asset value has fallen (for example. B, the seller`s base in his assets exceeds their market value), the purchase of assets would result in a “reduction” of the assets purchased. The tax treatment of a share purchase is also more favorable for sellers, as the transaction usually results in a single level of shareholder taxation.

This contrasts with possible double taxation at both company and shareholder level in the case of a purchase of securities […].