Stock Purchase Agreement

A Stock Purchase Agreement is an agreement between an individual (the Seller) and a shareholder (the Purchaser) for the sale and transfer of stock. A Stock Purchase Agreement is important because it establishes a chain of ownership of the stock, documents the purchase price and the number of stock shares purchased. This agreement includes provisions regarding redemption of the shares and who has the first right of refusal. It is important that stock purchase agreements are in writing as this documentation is necessary for compliance with state and federal laws and for tax purposes. (continued ...)