A share purchase agreement is a share sale/purchase agreement. If you`re wondering what the difference is between the share subscription agreement and the share purchase agreement, you may own a business or consider starting a business that would require one of these agreements. Understanding the differences between these two types of agreements can help you use the correct version for your business needs. There are two common aspects that create and establish the relationship between the two parties. This is the shareholder contract and the share purchase agreement. One party uses it so that the other party that invests can also participate in the process. To resolve such issues with shareholders, companies generally opt for out-of-court transactions such as arbitration, conciliation or negotiation between the company and shareholders. The agreement defines the parties, the shares for sale (issuing company, number and class of shares), the purchase price, the date and method of payment, and the reference date. The agreement contains a number of insurance and guarantees, including the seller`s right to transfer ownership of the shares and the buyer`s obligation to pay the shares. Such agreements between the two parties form the basis of the contract structure. A share subscription agreement will provide information on the company`s shares and the price at which the shares will be sold. It gives an investor an overview of the value of the company`s shares.
Typically, a company has two opportunities to raise capital. They can either go public and issue shares on the general and stock exchange, or invite private investors. In all cases, the share exchange contract, which determines the number of shares a company is willing to give to the subscriber, and the price at which those shares are given comes into play. Some of the most common clauses in a share subscription contract are confidentiality, precedent terms, guarantees, compensation, etc.