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Once an asset purchase is complete, the assets and liabilities that have been purchased are moved to the new entity and the old entity (and any assets or liabilities it still owns) must be wound down. In a stock purchase, the buyer purchases the entire company, including all assets and liabilities.

Stock Purchase Due Diligence Checklist Record company details. Organization and Good Standing: Copies of Company's Articles of Incorporation and Amendments. Copies of Company's By-Laws and Amendments. Documents on Pending and Threatened Litigation. Table of Organization:

SPAs are required whenever an individual or corporation sells or purchases stocks in another business or corporation.

A SPA should specify the sale price for the shares, specify the currency and timescale for the sale, and list any other conditions like staged payments. Usually, payment is made in cash, although sometimes the buyer may offer the seller some of its shares, or issue loan notes to the seller.

Stock purchase agreements (SPAs) are legally binding contracts between shareholders and companies. Also known as share purchase agreements, these contracts establish all of the terms and conditions related to the sale of a company's stocks.

At its most basic, a purchase agreement should include the following: Name and contact information for buyer and seller. The address of the property being sold. The price to be paid for the property. The date of transfer. Disclosures. Contingencies. Signatures.

The key provisions of a stock purchase agreement have to do with the transaction itself, such as the date of the transaction, the number of stock certificates, and the price per share. In addition, the agreement should specify the name of the corporation whose stock is being sold in the transaction.

Financial statements (to verify the accuracy of any representations or warranties made in the asset purchase agreement) Balance sheet. Income statements. Profit and loss statements. Accounts receivable. Tax returns or other documentation showing tax clearance with the IRS.

Steps in Drafting a Contract Determining if all parties can participate in a contract. ... Determining the consideration of the contract. ... Determining the contract's terms. ... Considering using a confidentiality clause. ... Adding a dispute resolution clause. ... Including a termination of contract clause.

Stock Purchase Agreements (SPAs) are contracts that transfer ownership of stock from the seller to the purchaser. SPAs are used in M&A activity. The basic terms of the deal are the seller's and buyer's legal names, the number of stocks being purchased and at what price, and the closing date.