Purchase and sale of shares

A contract for the sale and purchase of a specified number of shares at a specified price is known as a share sale and purchase agreement. Shareholders who sell their shares are the sellers, while those who purchase them are the buyers. The terms and circumstances of the sale and acquisition of the shares are described in this agreement.

Shares are fixed, recognisable capital units that reflect a shareholder's interest in a business. When someone has shares in a corporation, that individual automatically gains the ability to transfer and transmit the shares as a member of the company. Here is collective information on 80g certificate.

Shares of a shareholder may be sold in whole or in part. If a shareholder sells all of its shares in the firm, it entirely forfeits its ownership stake in the business and stops being a shareholder. In a similar vein, a party forfeits its interest in the total number of shares it sold to the buyer if it sells only a portion of its shares. In contrast to a share subscription agreement, which is used when a corporation is selling its shares, a share sale and purchase agreement are used when a shareholder of a firm is selling previously issued shares to a third party. Important details including the parties to the transaction, a summary of the shares, the purchase price (consideration), the warranties and representations made by the parties, and the pre-and post-completion obligations must all be included in the document.

The parties: The firm, the buyer, and the seller are the parties to this agreement (whose shares are being sold). It should be noted that while corporations and organisations can own shares in a firm, the seller or buyer can be either an individual, corporation or any other type of organisation.

The shares: The form filler must specify the type and quantity of shares that will be sold to the transferee in this document.

The consideration: It represents the total cost of all the shares sold in accordance with the contract. The form-filler will include the purchase cost, the mode of payment, and additional payment terms, such as:

      (a) if a deposit will be requested from the buyer(s);

      (b) if the customer intends to pay in instalments or all at once;

      (c) the payment method;

      (d) the payment date.

Completion: When ownership and title to the shares are transferred to the buyer or buyers, this happens. It details the completion date and location. It also covers the parties' commitments upon completion.

The parties' promises and representations: This is the formal commitment to carry out particular activities or refrain from doing so. The contract also includes the buyer and seller's covenants.

Termination: This contains the reasons why a party might be able to end the agreement as well as what would happen in such a scenario.

When one party wishes to sell all or a portion of its shares to another, this paper is employed. The parties shall execute this Agreement by their respective signatures. If one of the parties is a corporation, the corporation may place its common seal on the agreement, which must be signed by two of the corporation's directors or by one director and one secretary on behalf of the seller. 

80g registration is a must for NGOs who wish that their donors shall get a 50 percent tax rebate on their donations.