Stock Purchase Agreement

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                <p>Stock purchase agreement when anybody heard about
this, generally comes to mind it must be an agreement for purchasing a
stock. Actually it means an agreement between a private company and its
share holder. The purpose of this agreement to regulates the sale and
transfer of company's share. In these type of agreement generally
consists terms as the right of first refusal, redemption of the share,
bankrupt, resigns, retires or dies.</p>
<p>While signing a stock purchase agreements there are some important
facts that we have to go through them:</p>
<ul>
<li>How many shares have being sold and what is the purchase price of the
stock.</li>
<li>Representation and warranties given from seller side: The company or
organization selling stock is in good position in the market, has the
authority to enter through the agreement and perform its obligation,
all the statement made by the seller must be under accounting principle
and represent the financial condition of the business, must provide the
accurate list of all tangible and intangible assets of the business, the
seller has no illegal according to any federal, state, or local laws and
many more representation and warranties are there which can be described
by a good stock purchase agreement lawyer.</li>
<li>Representation and warranties given from buyer side: In case of buyer
side the first two points are same as seller side that is; the seller is
in good position and authority to enter through the agreement. The extra
thing is in buyer part is the purchase is in cash or non-cash.</li>
<li>After consulting a good business lawyer you should enter the tax
issue inside the agreement.</li>
<li>The deal closing condition should be clearly mentioned.</li>
<li>There must be a provision stating the nature and extent of any
unknown and unanticipated litigation, antitrust or other governmental
problems.</li>
<li>There should be condition under which the closing time and date can
be change.</li>
</ul>
<p>Â </p>
<p>There are some questions which should ask by the investor company to
make sure that he flushes out any concerns with the business:</p>
<ul>
<li>What is the exact outstanding of the company?</li>
<li>The financial statements provided by the company are true and correct
in all aspect under the general accounting procedures?</li>
<li>The company should not have any liabilities between the First and
last balance sheets.</li>
<li>Company should own all of the assets it purports to own, without
liens or encumbrances.</li>
<li>Company's intellectual property and products should not be involve in
breaking of rights of other.</li>
<li>The company's should not be breaking any law in his business
procedure.</li>
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posted:11/20/2011
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