A share purchase agreement is a bilateral agreement. In a share purchase agreement, a particular number of shares is agreed to sell to another person for a particular price. The main purpose of the agreement is to prove that the terms and conditions of the contract are mutually agreed upon. Such an agreement prescribes the price of shares, and the number of shares that are to be sold, the conditions precedent and conditions subsequent by the parties. The shares will be allotted after the parties to an agreement sign it.
A Share Purchase Agreement is a significant commercial practice when a shareholder is being initiated. Non-execution of such a document can have several unpleasant consequences.
Since the contract is bilateral, it gives opportunities to both parties to take off their respective interest. Being a detailed document, it covers each facet of the transaction. Both parties must carefully check each clause in the document, and understand it.
