Contract for the sale of corporate rights: a practical guide to drafting

The purchase and sale of corporate rights is a common business transaction. This process is associated with a number of legal nuances, which makes the careful drafting of the sales contract (SCP) a key factor in the successful completion of the transaction.

This guide is designed to help you with the practical aspects of drafting a DCP of corporate rights.

The main points of the DCP of corporate rights

1. Parties to the contract:

• Seller: The individual or legal entity that owns the corporate rights being sold.
• Buyer: A natural or legal entity that acquires corporate rights.

2. Scope of the contract. Clearly identify the corporate rights being sold, including:

• Name of the legal entity.
• The size of the share in the authorized capital (if it is about the sale of the share).
• Identification number of the legal entity.
• Other data that uniquely identify corporate rights.

3. Essential terms of the contract:

• Specify the clear price at which the corporate rights are sold.
• Describe the procedure and terms of payment (cash, bank transfer, installments, etc.).
• Determine the date by which the seller must transfer the corporate rights, and the buyer must pay their value.
• Set the moment from which the buyer is considered the owner of corporate rights (usually from the moment of payment or state registration of the change of ownership).

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4. Additional conditions:

• Seller's guarantees. The seller can provide guarantees regarding the truthfulness of information about corporate rights, the absence of debts, the validity of permits, etc.
• Responsibilities of the parties. Determine the responsibility of the parties for non-fulfillment of obligations under the contract.
• Dispute resolution procedure. Specify the method of resolving disputes that may arise between the parties (negotiations, court, etc.).
• Privacy. Indicate the obligations of the parties regarding the non-disclosure of information obtained during the conclusion and execution of the contract.
• Force majeure circumstances. Define the list of circumstances that exempt the parties from responsibility for non-fulfillment of obligations (natural disasters, war, etc.).
• Change and termination of the contract. Establish the procedure for making changes to the contract and terminating it.

5. Special conditions:

• If the alienation of corporate rights requires the consent of third parties (for example, other members of the LLC), this condition should be specified in the contract.
• If it is necessary to obtain prior consent from the antimonopoly body or other government bodies, this should also be reflected in the contract.
• If assets or liabilities of a legal entity are transferred together with corporate rights, this should be described in detail in the contract.

6. The contract is signed by two parties. In some cases, state registration of a change in the owner of corporate rights may be required.

The above list is indicative and may be supplemented depending on the specifics of the agreement. It is recommended to contact a qualified lawyer to draw up a legally competent DCP for the purchase and sale of corporate rights.

Buying and selling corporate rights: legal literacy for a successful deal

The conclusion of a contract for the purchase and sale of corporate rights requires careful legal preparation. Hiring a qualified lawyer guarantees the legality of the agreement, protection of your interests, saves time and effort, and also provides access to professional advice and additional services. Do not skimp on legal assistance, because it is the key to a successful and safe transaction with minimized risks.

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