Document background
The Shareholder Purchase Agreement (SPA) is a crucial document used in corporate transactions involving the transfer of company shares in India. It is typically employed when shareholders wish to sell their stake to new investors, during corporate restructuring, or in merger and acquisition scenarios. The agreement must comply with Indian corporate law, particularly the Companies Act 2013, and may need to address foreign investment regulations if international parties are involved. The SPA details the entire transaction process, from initial conditions to completion, including purchase price, payment terms, representations and warranties, indemnities, and closing requirements. It's essential for protecting both parties' interests and ensuring a smooth transfer of ownership while maintaining compliance with regulatory requirements. The document becomes particularly important in private company transactions where shares are not traded on public markets and in situations involving significant ownership changes or strategic investments.
