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A stock purchase agreement is a legal document signed by two parties involved in the sale or purchase of a company's shares. It is commonly used by small corporations and can involve either the company or its shareholders selling stock. This agreement protects both buyers and sellers and differs from an asset purchase agreement, which involves the sale of a company's assets rather than shares. Key elements included in a stock purchase agreement are the company's name, purchaser's name, par value of shares, number of shares sold, transaction details, and representations and warranties from both parties. It also addresses potential employee issues, such as bonuses and benefits, and includes an indemnification agreement for unforeseen costs.
