{"id":5646,"date":"2020-03-30T13:58:59","date_gmt":"2020-03-30T08:28:59","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=5646"},"modified":"2021-01-13T12:58:40","modified_gmt":"2021-01-13T07:28:40","slug":"share-purchase-agreement-in-nbfc","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/share-purchase-agreement-in-nbfc\/","title":{"rendered":"What is Share Purchase Agreement in NBFC?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The purpose of the\nShare purchase agreement in NBFC is as similar to the Share Purchase Agreement,\nin general, i.e. to bring clarity to the terms and conditions of the\nsale\/purchase of the share which is subject to mutual consent of the parties,\ni.e. buyer and seller.<\/p>\n\n\n\n<p>In this topic, we will give a brief on the Need for Share Purchase Agreement, what is <a href=\"https:\/\/corpbiz.io\/share-purchase-agreement\"><strong>Share purchase agreement<\/strong><\/a> in NBFC, and what are the requisites of the Share Purchase Agreement?<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/share-purchase-agreement-in-nbfc\/#The_Need_for_Share_Purchase_Agreement_%E2%80%93_An_Overview\" >The Need for Share Purchase Agreement &#8211; An Overview<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/share-purchase-agreement-in-nbfc\/#What_is_Share_Purchase_Agreement_in_NBFC\" >What is Share Purchase Agreement in NBFC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/share-purchase-agreement-in-nbfc\/#Requisites_for_Share_Purchase_Agreement_in_NBFC\" >Requisites for Share Purchase Agreement in NBFC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/share-purchase-agreement-in-nbfc\/#Takeaway\" >Takeaway<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Need_for_Share_Purchase_Agreement_%E2%80%93_An_Overview\"><\/span>The Need for Share Purchase Agreement &#8211; An Overview<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Share Purchase Agreement is a legal agreement between the seller and buyer that constitutes the conditions of purchase of shares. If any Company is buying or selling shares with another company or individual, it is required to use a Share purchase agreement. For instance, if a company has two shareholders who have equal shares and one exit from the company or wants to transfer the shares, a share purchase agreement can be used to buy \/transfer his shares to another individual by following the proper <a href=\"https:\/\/corpbiz.io\/nbfc-compliance\"><strong>NBFC compliances<\/strong><\/a>. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Share_Purchase_Agreement_in_NBFC\"><\/span>What is Share Purchase Agreement in NBFC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is a formal agreement executed and signed by the parties affecting the purchase of shares. It is a legal agreement between the buyer and seller at a stated price, i.e. where the seller agrees to sell the shares at a determined price. The primary objective of the Share Purchase agreement in <a href=\"https:\/\/corpbiz.io\/nbfc-registration\"><strong>NBFC<\/strong><\/a> is to ensure that the covenants related to buying and selling are agreed upon by the parties. Share Agreement in NBFC determines that the agreement is set right by both the seller and the buyer.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/step-by-step-nbfc-registration-procedure\/\">NBFC Registration: Step by Step Procedure<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requisites_for_Share_Purchase_Agreement_in_NBFC\"><\/span>Requisites for Share Purchase Agreement in NBFC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A share purchase\nagreement is an agreement that protects the parties&#8217; interest, i.e. the\nagreement proves that the sale and the covenants of the agreement were agreed\nupon by the parties.<\/p>\n\n\n\n<p><strong><em>Below mentioned are the requisites that outline the expectation of the parties-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Details of the Buyer.<\/li><li>Name of the NBFC.<\/li><li>Proper disclosure of the conditions, obligations, and permissions that can be taken by both the parties.<\/li><li>It shall include a formal obligation that binds both the parties, i.e. buyer and seller.<\/li><li>Warranties to be made by the seller.<\/li><li>Purchaser&#8217;s right to contract, i.e. Purchaser&#8217;s representation and warranties.<\/li><li>In case of default on payment from the buyer\u2019s side, there shall be a proper protection policy to protect the interest of the seller.<\/li><li>In case, legal disputes arise, proper notice shall be served.<\/li><li>In case of any dispute among the parties, <strong>Alternate Dispute Mechanism<\/strong> to be used to resolve the dispute.<\/li><\/ul>\n\n\n\n<div class=\"shadow1\">Alternate Dispute\nMechanism refers to the means of settling the disputes of the parties outside the courtroom. It includes negotiation, neutral evaluation in the early phase of the dispute, and through Mediation, conciliation, and arbitration.<\/div>\n\n\n\n<ul><li>However, in case failure of Alternate Dispute Mechanism, there shall be a proper disclosure in the Jurisdiction clause of the share purchase agreement, which courts should be approached in case of legal dispute.<\/li><li>Share Purchase agreement in NBFC shall be highly confidential and cannot be revealed without the Parties\u2019 consent.<\/li><li>Additionally, in the case of share transfer, the process to be used shall be disclosed in the share purchase agreement of NBFC.<\/li><li>Disclosure of exercising voting rights.<\/li><\/ul>\n\n\n\n<p>Apart from the\nabove-mentioned requisites, there are also important key points that are\nrequired to be kept in mind at the time of entering into a Share Purchasing\nAgreement in NBFC-<\/p>\n\n\n\n<ul><li>Share Purchase agreement in NBFC must have a binding effect on both parties.<\/li><li>The agreement can be modified or amended as per the situation, but only after signing by both parties.<\/li><li>Force Majeure clause shall also be included taking into consideration the unpredictable and sudden <em><strong>financial crisis<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Financial_crisis\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>.<\/li><li>The Share Purchase Agreement in general or in case of NBFC shall be made by taking into consideration the <strong>Severability<\/strong> Factor.<\/li><\/ul>\n\n\n\n<p><strong><em>Severability means\nthat in case of any event where a part or parts of the agreement be held\nunenforceable due to any reason, the remaining share purchase agreement shall\ncontinue to be in force.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Takeaway\"><\/span>Takeaway<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Share Purchase Agreement is an agreement that establishes a relation between the parties. It covers every detail of the shares that are being purchased, sell or transferred. Single negligence or absence of legally enforceable agreement can result in disputes and litigation. Share Purchase agreement in NBFC ensures that proper <a href=\"https:\/\/corpbiz.io\/due-diligence\"><strong>due diligence<\/strong><\/a> has been done while formulating the covenants and the rights and liabilities of the Parties.<\/p>\n\n\n\n<p>For any documentation, agreement or any stamp duty related query, feel free to contact <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a>, our team of experts will guide you about each documentation and agreement to be executed while running your business.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/future-of-nbfcs-in-india\/\">\nFuture of NBFCs in India \u2013 A Reality Check<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The purpose of the Share purchase agreement in NBFC is as similar to the Share Purchase Agreement, in general, i.e. to bring clarity to the terms and conditions of the sale\/purchase of the share which is subject to mutual consent of the parties, i.e. buyer and seller. In this topic, we will give a brief [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":5648,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[438,91],"tags":[437],"acf":{"service_id":"275"},"authorName":"Priyanka Bajpayee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220303-WA0005.jpg","authorDescription":"A Company Secretary together with PG in international Business, she has gained significant experience as legal content writer. She has keen interest in doing research and writing on legal and financial subject matters. She also holds work experience in legal compliances.","postViews":5096,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5646"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=5646"}],"version-history":[{"count":26,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5646\/revisions"}],"predecessor-version":[{"id":24069,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/5646\/revisions\/24069"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/5648"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=5646"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=5646"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=5646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}