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A Share Purchase Agreement (SPA) spells out the terms and conditions when you're buying or selling shares in a Hong Kong company. It's the key legal document that protects both buyers and sellers by clearly stating the price, payment terms, and what happens before and after the deal closes.

Beyond just covering the basics, an SPA includes important safeguards like warranties about the company's financial health, any restrictions on selling the shares later, and what happens if something goes wrong. Under Hong Kong's Companies Ordinance, these agreements need specific details about share transfers and must follow local corporate governance rules - making them essential for both private deals and larger corporate acquisitions.

You need a Share Purchase Agreement when buying or selling shares in a Hong Kong company - from small private deals to major corporate acquisitions. It's essential for any share transfer that goes beyond family members or simple internal restructuring, especially when dealing with external investors or complex ownership changes.

The agreement becomes particularly important when the deal involves significant value, multiple shareholders, or foreign investment. It helps prevent disputes by documenting key terms like payment schedules, completion conditions, and seller warranties. For startups seeking investment or established companies planning ownership transitions, having this agreement in place protects everyone's interests and ensures compliance with Hong Kong's corporate regulations.

• Share Purchase Agreement Between Shareholders: Used for direct share transfers between existing shareholders, with detailed provisions for maintaining company relationships and existing shareholder rights.
• Stock Sale Contract: Simplified version focused on straightforward share sales, commonly used for smaller transactions or when selling to external buyers.
• Shareholder Promissory Note: Specialized agreement for deferred payment arrangements in share purchases, including detailed payment terms and security provisions.

• Company Shareholders: Both buyers and sellers of shares who need the Share Purchase Agreement to document their rights, responsibilities, and the terms of their transaction.
• Corporate Lawyers: Draft and review agreements to ensure compliance with Hong Kong company law and protect their clients' interests.
• Company Directors: Often involved in approving and executing the agreement, especially when dealing with significant ownership changes.
• Investment Bankers: Help structure deals and negotiate terms for larger transactions or when raising capital.
• Company Secretaries: Handle documentation and ensure proper filing with the Companies Registry after share transfers.

• Company Details: Gather current shareholding structure, company registration numbers, and director information from the Companies Registry.
• Share Information: Document the exact number, class, and price of shares being transferred, plus any existing restrictions on transfer.
• Party Details: Collect identification and contact information for all buyers, sellers, and authorized signatories.
• Payment Terms: Specify payment schedule, method, and any conditions or escrow arrangements.
• Due Diligence: Review company financial statements, material contracts, and outstanding liabilities before finalizing terms.
• Document Generation: Use our platform to create a customized Share Purchase Agreement that meets Hong Kong legal requirements.

• Party Details: Full legal names, addresses, and registration numbers of all buyers, sellers, and the company.
• Share Specifics: Precise description of shares being sold, including class, number, and price per share.
• Payment Terms: Clear payment structure, timing, and completion mechanisms under Hong Kong law.
• Warranties and Representations: Seller's guarantees about company status, share ownership, and financial condition.
• Completion Requirements: Steps for transfer execution, including necessary board approvals and documentation.
• Governing Law: Explicit statement confirming Hong Kong law applies and local courts have jurisdiction.
• Boilerplate Clauses: Standard provisions for confidentiality, entire agreement, and dispute resolution.

A Share Purchase Agreement differs significantly from an Asset Purchase Agreement in both scope and application within Hong Kong's legal framework. While both involve business transactions, they serve distinct purposes and carry different legal implications.

• Transaction Focus: Share Purchase Agreements transfer company ownership through share sales, while Asset Purchase Agreements deal with specific business assets, equipment, or property.
• Liability Transfer: Share purchases automatically include all company liabilities, whereas asset purchases let buyers select specific assets and avoid certain liabilities.
• Regulatory Requirements: Share transfers need Companies Registry updates and stamp duty payments; asset transfers may require different registrations depending on the asset type.
• Due Diligence Scope: Share purchases require comprehensive company-wide due diligence, while asset purchases focus only on the specific assets being transferred.