Buying shares is a rather complicated process, which requires a preliminary study of all the nuances. It is strongly not recommended to start working with shares without at least basic knowledge.
One of the controversial points in this sphere is the drawing up of the share purchase document. Whether it is worth drawing it up or not, the specifics are something that needs to be dealt with.
Share Purchase Agreement: Is It Necessary?
Many people believe that this agreement may not be drawn up, as you can prepare a special order for the transfer of shares, thanks to which you can make changes in the register of shareholders.
However, from the legal side it is still necessary to draw up an agreement, since the availability of a document will help defend one’s rights when disputes arise.
What Should the Agreement Include?
The share purchase agreement has the same general provisions as the standard share purchase agreement. It is important to specify the name and number of shares to which belongs:
- Category and type of shares;
- registration number of the issue of equity shares;
- the full name of the issuer.
It is not unreasonable to add the address and PSRN of the issuer, information about the registrar.
The number of shares should be specified in pieces, which will allow the registrar to take them into account.
Moreover, it is obligatory to specify in the agreement:
- The method of payment;
- The order of transfer of rights.
It is worth mentioning that in most cases the price of shares is not equivalent to the nominal value.
Features You Should Know
Often the sale and purchase agreement also contains assurances from the seller that there are no reasons why the market value of the JSC may change.
Also, in terms of payment of the amount after the registration of the transaction in the register, the document should contain information about the pledge of shares with a definition of the seller’s rights over them. This will help protect the seller from fraudulent schemes and give a guarantee that the buyer will pay the specified amount.
The following information should be included in the clause of the share transfer agreement:
- allocation of costs for the registrar’s services;
- the period of transfer to the registrar of all the necessary data to create the personal account of the buyer and the procedure for writing off the shares from the seller’s account to be credited to the buyer’s account.
All of this information will help regulate the relationship between the seller and the buyer, and it will be legally binding.
In this case, both parties will have their obligations and rights, which they must fulfill in order not to violate the terms of the transaction and not to suffer from any costs.
On the Internet you can find a contract sample, which will allow you to get acquainted with the approximate structure and type of the finished document.
Services for Working With Important Documents
Deciding to draw up an agreement template and subsequently a finished document, it is important to be prepared to study all the nuances.
When buying shares it often happens that personal presence to sign the document of purchase and sale is simply not possible, in this case it is necessary to rely on online resources.
Pandadoc service helps to solve a number of problems and makes it possible to conclude contracts even in electronic format. Creating, editing and signing contracts will take a few minutes, if you are familiar with the interface of the platform.
You no longer need to spend a lot of time and effort working with paper contracts, because everything can be stored in a conveniently accessible gadget and at the same time have full legal force.
On the Pandadoc service you can find a large number of ready-made sample documents, with the help of which drafting contracts will take less time.