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Two key documents often arise when you’re involved with company shares in the UK: Share Purchase Agreements and Shareholder Agreements.
They sound similar, but they do have very different purposes – Lets break them down.
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What is a UK Share Purchase Agreement?
When someone purchases a company’s shares instead of the company’s assets directly, this is known as a Share Purchase Agreement (SPA).
In terms of property, this means that you purchase the business that already owns a property or a portfolio of properties, rather than purchasing the assets separately. Because ownership of the property remains within the company, you’re only changing who owns the company, this can save on stamp duty and speed up the transaction.
The document typically can outline:
- Parties involved
- Sale/purchase price
- Number of shares
- Warranties & indemnities
- Fees
- Completion steps
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What is a UK Shareholder Agreement?
A Shareholder Agreement is a private contract between the shareholders of a company, think of it as a type of rulebook.
In short, it outlines:
- Rules of how the business is to be run
- The rights and responsibilities of each shareholder
- Detail the procedure if shares are sold or disputes arise
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Key Differences
- Share Purchase Agreement (SPA) = Governs the actual sale and transfer of shares
- Shareholder Agreement = Governs relationships between shareholders and company operations
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How can Advocate Finance help?
If you are interested in purchasing a company’s shares to obtain the properties (assets) within that company, we can help. Our experienced Advisers have the knowledge and expertise to tailor you an individual quote for your needs. We also have access to the limited panel of lenders who currently deal with Share Purchase Agreements.
We provide a FREE assessment on all our services.
Please contact us directly for more information, or use the Get in Touch With Us Today feature at the bottom of this page.
