A share purchase agreement (SPA) is a legal contract used in Nigeria to outline the terms of buying or selling shares in a company. This agreement is commonly used when a company is being sold or when someone wants to buy assets in a business. The SPA outlines the terms of the sale including the amount of money being exchanged, the number of shares being sold, and other agreements between the parties.
It`s important to note that a share purchase agreement in Nigeria is a legally binding document. Therefore, it`s essential to understand the terms before agreeing to a transaction. The SPA outlines the rights and responsibilities of both parties, which typically includes the seller`s obligation to deliver the shares and the buyer`s obligation to pay the agreed amount.
The SPA typically begins with a description of the shares being sold, including the number of shares, class, and any restrictions. It should also include details on the purchase price, the terms of payment, and what happens if the buyer fails to pay.
The agreement should also outline any warranties and representations made by the seller. For example, the seller may need to confirm that they have the authority to sell the shares or that there are no outstanding debts attached to the shares.
To protect both parties, the SPA may also include indemnity provisions. These provisions specify who is responsible for any losses or damages that may occur in the future.
Finally, the SPA should include details on how the agreement can be terminated. This should include details on the termination clauses and what happens if either party breaches the agreement.
In conclusion, if you are looking to buy or sell shares in a Nigerian company, it`s important to have a well-drafted share purchase agreement in place. This legal document outlines the terms of the sale and helps to protect both parties. It`s essential to work with an experienced lawyer who understands the intricacies of Nigerian corporate law to ensure that your agreement is enforceable.