SPA

In practice

The SPA is the purchase agreement for a company or parts of it. Besides the purchase price and the shares, the sellers’ guarantees are the core of the agreement. They can take the place of statutory liability for defects and give assurances about the state of contracts, rights, taxes and legal disputes. An incorrect assurance can later give rise to a claim for payment. Known risks are covered by indemnities. What the assurances cover follows mainly from the due diligence. The relationship between the shareholders is governed not in the SPA but in the articles of association, the shareholders’ agreement or the investment agreement, often in the same notarial deed. Where shares in a GmbH are purchased, the entire contract must be recorded by a notary, including the annexes that form part of the contract. Otherwise it is void.