Share Purchase Agreement (SPA)

A share purchase agreement governs the transfer of a company’s existing shares from the seller to the buyer. The sale of a company, the departure of a shareholder or an investor buying shares from existing shareholders (a secondary transaction) are carried out with this agreement. The price is paid to the selling shareholder, not the company.

Form of Transfer

• Joint stock company: If registered share certificates have been printed, transfer is by endorsement and delivery of the certificate; if not, by a written assignment. If the articles restrict transfers (TCC Art. 493), the board’s approval is also required. The transfer is recorded in the share register.
• Limited liability company: The transfer is made in writing with notarised signatures; unless the articles provide otherwise, general assembly approval is required (TCC Art. 595). The transfer is registered with the trade registry.

Key Provisions

• Purchase price and adjustment: Price adjustment based on closing accounts (net debt, working capital) or a fixed price (locked box),
• Payment and security: Holding part of the price in escrow or deferring it, earn-out payments,
• Conditions precedent: Competition Board and sector-specific approvals, third-party consents,
• Representations and warranties and indemnity: Assurances on the company’s condition and their limits,
• Seller covenants: Running the company in the ordinary course until closing, post-closing non-compete.

Points to Watch

• Due diligence: The price and assurances are shaped by the findings of due diligence.
• Competition Board approval: Transfers resulting in a change of control require approval if the thresholds are met; closing without approval constitutes gun jumping. See Acquisition.
• Other shareholders’ rights: Right of first refusal and tag-along rights should be checked before the transfer.
• Tax: If the seller is a company, part of the gain on the sale of participation shares held for two full years may be exempt from corporate tax; the rate was reduced from 75% to 50% from 27 November 2024. See Exit.