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The MOI automatically binds new shareholders without their explicit agreement, while a Shareholders Agreement needs to be agreed to before being binding.
As share purchase agreements just lay down a lawful agreement between the parties about the transfer of shares, Shareholders agreement lays down the rights and other obligations of the parties. It defines the actual relationship of the parties in terms of rights generated by purchasing shares of the company.
A company executes a Share subscription agreement (SSA) in case of a fresh issue of shares. A shareholders' agreement (SHA) is a contract that contains the rights and obligations of the shareholders in a company.
The advantage of a share purchase agreement is that the intentions of the parties are documented in a legally binding contract. There is often no need for the involvement of third parties.
Shareholder's agreement is primarily entered to rectify the disputes that occurred between the company and the Shareholder. Meanwhile, the Share Purchase agreement is a document that legalizes the process of transaction of share held between the buyer and the seller.
It's important to include details about the type of shares being sold in your Share Purchase Agreement because the type of share will determine the buyer's voting rights, dividend yields, and percentage of ownership in the company.
A Share Purchase Agreement, also called a Stock Purchase Agreement, is used to transfer the ownership of shares (also called stock) in a company from a seller to a buyer. Shares (or stock) are units of ownership in a company that are divided among shareholders (also called stockholders).
Shareholder's agreement is primarily entered to rectify the disputes that occurred between the company and the Shareholder. Meanwhile, the Share Purchase agreement is a document that legalizes the process of transaction of share held between the buyer and the seller.
A purchase contract is as legally binding as is stated in the agreement itself. A purchase agreement should stipulate acceptable reasons for a buyer backing out of a purchase. Otherwise, once it's signed, you stand to lose your earnest money deposit should you break your contract.