SHAREHOLDER PURCHASE AGREEMENT ADVISORY: A COMPLETE GUIDE TO SMOOTH OWNERSHIP TRANSFERS
What Is a Shareholder Purchase Agreement in Ownership Transfers?
Anytime ownership in a business changes hands a founder exits, an investor comes in, partners buy each other out, or a business gets acquired there’s a Shareholder Purchase Agreement at the Centre of it. It’s the document that defines what’s actually being agreed: the price, how it gets paid, what each party is promising about the business, and who bears responsibility if something turns out to be different from what was represented.
A poorly structured SPA is one of the most common sources of post-deal disputes. Valuations get contested. Tax liabilities that weren’t accounted for surface after closing. Warranties turn out to be unenforceable. One party feels they didn’t get what they agreed to. These problems are expensive and damaging and most of them are avoidable with the right advisory support before the agreement is signed.
At SRC, we work on the financial, tax, and commercial side of share transactions making sure the deal is structured sensibly and that the agreement reflects what was actually negotiated, not just what was easy to document.
Where We Add Value?
The legal drafting of an SPA is handled by lawyers. Our role is everything around it and in most transactions, that’s where the real complexity lives.
Before any agreement is drafted, the transaction needs to be structured properly. Is this a share sale or an asset sale? Is the buyer acquiring the entire business or a partial stake? Is the structure going through a holding company? Each of these choices has different tax implications for both sides, and the right answer depends on the specific circumstances of the deal. We work through this early so that the transaction is structured in the most commercially and tax-efficient way before anyone starts negotiating terms.
We also carry out financial due diligence reviewing the financials, identifying tax exposures, checking compliance status, and flagging any contingent liabilities that could affect the valuation or the deal terms. This protects buyers from inheriting problems they didn’t know about, and it gives sellers a cleaner position to negotiate from.
On the tax side, we assess capital gains implications, stamp duty, withholding tax, and any GST exposure relevant to the transaction. Share transfers can have significant tax consequences for both parties, and structuring them incorrectly or simply not thinking them through can cost considerably more than the advisory would have.
Once the deal terms are being negotiated, we provide independent input on valuation, payment structuring, and risk allocation. We work alongside the legal team to make sure the commercial and financial terms in the agreement are consistent with what was actually agreed between the parties.
After closing, we handle the implementation share transfer documentation, ROC filings, accounting adjustments, shareholder register updates, and any ongoing compliance requirements that follow from the transaction.
What a Good SPA Need to Cover?
Beyond the headline price and payment terms, a properly structured agreement needs to address representations and warranties what each party is asserting about the business and its condition. It needs indemnity provisions that define who is responsible if those representations turn out to be inaccurate. It should cover escrow or holdback arrangements where appropriate, non-compete and confidentiality obligations, conditions that need to be met before the deal closes, and a clear dispute resolution mechanism if things go wrong after closing.
These aren’t formalities. Each of these clauses has real financial consequences, and getting them right requires someone who understands the commercial and tax implications not just the legal language.
Who This Is For?
Founders who are planning a full or partial exit. Family businesses transferring ownership between generations or family members. Investors acquiring equity stakes. Private equity buyers. Companies restructuring their shareholding internally. Partners who need to resolve an ownership change cleanly and without residual disputes.
The common thread is that these are transactions where the stakes are high enough that getting the structure and documentation right genuinely matters.
What You Walk Away With?
A transaction that’s structured to minimize tax leakage and legal risk. A clear, commercially sound agreement that accurately reflects what was agreed. Due diligence that means there are no post-deal surprises. And a closing process that’s handled properly so that once the deal is done, it stays done.
Let’s Talk
If you’re planning a share transfer, investor entry, founder exit, or any other change in ownership, the earlier you get the structure right, the smoother the process. Reach out to our team at SRC and we’ll walk you through what needs to be considered for your specific situation.
