Looking for a solicitor to help with a share purchase agreement?
A share purchase agreement - often called an SPA - is the legal document that governs the sale and purchase of shares in a company. If you're buying or selling a business through a share sale, the SPA is the single most important document in the entire transaction. It needs to be right.
I'm Steven Mather, and drafting, reviewing and negotiating share purchase agreements is a core part of what I do. I act for both buyers and sellers on business transactions usually worth between £250,000 and £10m, and I've handled hundreds of these deals. Whether you're selling your life's work or making a strategic acquisition, I'll make sure the SPA protects your interests.
What is a share purchase agreement?
In a share sale, the buyer purchases all (or some) of the shares in the target company from the existing shareholders. The company itself doesn't change - it keeps the same name, contracts, employees, assets, liabilities and bank accounts. What changes is who owns it. The SPA documents the terms of that transfer.
This is different from an asset purchase, where the buyer cherry-picks specific assets out of the company. If you're not sure whether your deal is a share sale or asset sale, have a look at my page on asset purchase agreements or get in touch and I will explain the difference.
Key provisions in a share purchase agreement
Every SPA is different, because every deal is different. But there are core provisions that appear in virtually every share purchase agreement I draft or negotiate.
The purchase price clause sets out how much is being paid, when and how. This might be a simple lump sum on completion, but more often it involves a mix of completion payments, deferred consideration and earn-out arrangements. Getting the price mechanics right is critical - particularly from the seller's perspective, because you want certainty that you'll actually get paid.
Warranties are promises made by the seller about the state of the company. They cover everything from the accuracy of the accounts to the status of employee contracts, tax compliance, intellectual property ownership and the absence of litigation. If a warranty turns out to be untrue, the buyer may have a claim for compensation. As a seller, I'll work to make sure the warranties are reasonable and proportionate. As a buyer, I'll push for comprehensive protection.
Indemnities are stronger than warranties - they're pound-for-pound promises to cover specific risks. If there's a known issue with the company - a pending tax enquiry, an ongoing dispute, an environmental liability - the buyer will often want a specific indemnity to make sure the seller bears the cost if it crystallises.
Restrictive covenants prevent the seller from competing with the business or poaching its customers and staff for a period after completion. These need to be carefully drafted to be enforceable - go too far and a court will strike them out entirely.
Completion mechanics set out what happens on the day the deal goes through - share transfers, board resignations, payment of funds, delivery of documents. I'll make sure completion runs smoothly with a detailed completion agenda.
Limitations on claims protect the seller by capping the buyer's ability to make warranty claims. These include time limits, financial thresholds (de minimis and basket provisions), and an overall cap - usually linked to the purchase price.
Buyer's perspective vs seller's perspective
The SPA is a negotiation. Every clause is a balance of risk between buyer and seller, and which side of the table you're on fundamentally changes what you want the document to say. I act for both buyers and sellers, so I know how to argue both sides effectively and I understand what the other side's solicitor will be pushing for. That experience is invaluable in getting a deal done efficiently.
How long does the SPA process take?
For a typical SME transaction, the SPA negotiation usually takes 4 to 12 weeks from first draft to agreed final version. That timeline depends on how quickly the parties respond to drafts, the complexity of the deal, and whether any issues come out of due diligence that need to be reflected in the agreement.
How much does it cost?
I work on fixed fees. For a standard share purchase agreement on a deal worth up to £1m, fees typically range from £5,000 to £15,000 plus VAT depending on complexity. Larger or more complex deals will be higher. I'll always give you a clear fixed fee before we start work.
Next steps
If you need a share purchase agreement drafted, reviewed or negotiated, get in touch. I'll give you a fixed fee and we can get moving quickly.
