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Stock purchase agreement (SPA) outlines terms and conditions for acquiring company shares. Structure varies based on factors like party relationships and deal size. Key sections include introduction, recitals, definitions, transaction details, RW, covenants, conditions, and dispute resolution.
In an asset sale, the ownership of these acquired assets would change hands, with the buyer negotiating separately for each asset. In a stock sale, ownership of such assets does not change hands in the same way. The target still retains its ownership typically, even if the target has a new owner.
There are two main kinds of stocks, common stock and preferred stock.
In the broadest sense, stock breaks down into two classes: Common Stock and Preferred Stock. Lets take a closer look at each class to better understand what makes each type unique.
Common stock and preferred stock are the two main types of stocks that are sold by companies and traded among investors on the open market. Each type gives stockholders a partial ownership in the company represented by the stock.
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Corporations create two kinds of securities: bonds, representing debt, and stocks, representing ownership or equity interest in their operations.
What is a Stock Purchase Agreement? A SPA primarily sets the price of the stock being sold and provides a clear framework for the transaction. Its key focus on risk prevention and mitigation makes it a critical tool in any stock transaction, whether between individuals or corporations.

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