Share Purchase Agreement Execution Requirements

If the due diligence phase is satisfactorily completed, the share purchase agreement is usually signed in a private document (in legal jargon, this phase is called “signing”). However, the execution of the transaction does not usually take place; In other words, there is no effective transfer of ownership of the shares to the buyer. Insurance, guarantees and covenants in a SPA should prolong the execution and delivery of the SPA and the conclusion of the transaction and thus go beyond the conclusion of the transaction. It is possible that certain misrepresentations and breaches of warranty may not be found until after the conclusion. Maintaining warranties, guarantees and insurance (as well as indemnification terms) beyond the conclusion of the transaction protects the buyer if he receives less than he negotiated for.