When using this proposal, it is important to consider all laws that may influence the interpretation of certain clauses of this treaty; For example, the law under which the company was created (CBCA or QBCA), the Civil Code of Quebec (on service agreements and mandates) and the applicable provisions of the Quebec Securities Act and its regulations. The share purchase agreement is an agreement par excellence legally used to transfer the shares of a company. Its main objective is to take control of the activity of a company acquired, coordinated and organized between them by a multitude of elements – assets, debts, organization, people – in order to respond to a given economic activity. It is very important to determine whether a share purchase agreement is the appropriate legal instrument for your situation. A share purchase agreement is required in the following situations: b) when the purchase-sale process is initiated by a letter of intent (model Y04200) instead of a detailed share offer (model Y04270) followed by a closing certificate (model Y04600). This is because the parties sometimes feel it is appropriate to submit the final conclusion of the purchase transaction to a number of conditions that must be met within a specified time frame. For example, obtaining prior administrative authorization necessary for the transfer, the favourable resolution of a dispute in which the company to be acquired is currently involved, etc. This is why signing is a “promise to purchase” that is subject to a number of requirements. If you would like more information about the share purchase agreement, please contact us. It should be noted that it is possible that a signature and closure will take place in the same action and not at different times. However, in practice, these cases are reduced to simple, low-complexity business purchases, regardless of a pre-acquisition condition or factor. Once due diligence is completed satisfactorily, the share purchase agreement is usually signed in a private document (in legal jargon, this phase is called “signing”).
However, as a general rule, the transaction does not take place; In other words, there is no actual transfer of ownership of the shares to the buyer. To transfer a business company, the buyer must acquire at least the majority of the voting rights issued and ongoing from the business. These shares may belong to one or more owners who agree to sell their shares for compensation. This transfer could, in theory, be proved by the fact that the shares constituting a majority of these registered holders in favour of the new owner are simply favourable in exchange for the agreed payment. However, where the entity for sale is a private issuer, the usual practice is usually to sign a share purchase agreement (which may be more or less detailed depending on the wishes of the parties). Financial statements are the date on which both parties would effectively discharge their key obligations (delivery of the property and payment of the agreed price) when the agreed terms are met, so that the financial statements are made, i.e. the conclusion of the transaction with the subsequent transfer of the shares. The signature is therefore the date on which the parties sign the agreement and, therefore, approve the transaction, i.e.dem date of implementation of the agreement. This model was designed specifically for the date a company sells its shares to a person (who is not yet a shareholder) and the sale results in the transfer of control to that new shareholder. (a) if the parties to the sale wish to avoid any complications or risks associated with the acquisition of assets; Asset acquisition may not be the most advantageous option, as some assets may be difficult to transfer or the cost of transferring them can be prohibitive; As such, buying shares can be a better alternative; and as soon as the contractual terms are met, the contract will have full legal effects.