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Stock Purchase Agreement Template – Free Download 2026

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When Do You Need a Stock Purchase Agreement?

An investor is purchasing equity in your corporation and both parties need a formal agreement documenting the purchase price, number of shares, representations and warranties, and closing conditions.

A shareholder is selling their interest to another shareholder or a third party under a buy-sell agreement provision, and the transaction requires formal documentation of the terms and transfer mechanics.

Your corporation is acquiring another company through a stock purchase (as opposed to an asset purchase), and the buyer needs comprehensive protections including indemnification, escrow, and due diligence conditions.

You are buying out a co-founder or departing partner and need a legally binding agreement that establishes the valuation, payment terms, and transfer of their shares back to the corporation or remaining shareholders.

An employee is exercising stock options and purchasing shares at the exercise price, requiring formal documentation that records the transaction and any applicable transfer restrictions.

What Should a Stock Purchase Agreement Include?

Parties and Share Identification

Identify the buyer and seller by full legal name and address. Specify the exact number of shares being sold, the class of stock, the par value, and the stock certificate numbers. If the corporation itself is a party, identify it separately.

Purchase Price and Payment Terms

State the total purchase price, the price per share, and the payment terms (lump sum at closing, installments, earnout, or escrow). If the price is subject to adjustment based on the company's financial condition at closing, describe the adjustment mechanism.

Representations and Warranties

Both the buyer and seller make sworn statements about specific facts. The seller represents that they own the shares free of liens, have authority to sell, and that the company's financial statements are accurate. The buyer represents they have the funds and authority to purchase. These provisions form the basis for indemnification claims if any statement proves false.

Due Diligence and Conditions Precedent

Specify the due diligence period during which the buyer may inspect the company's books, records, contracts, and operations. List all conditions that must be satisfied before closing, such as board approval, regulatory clearance, and satisfactory due diligence results.

Indemnification Provisions

Define each party's obligation to compensate the other for losses resulting from breaches of representations, warranties, or covenants. Specify the survival period for claims, any cap on indemnification liability, and the procedures for making and resolving indemnification claims.

Closing Mechanics

Detail the closing date, location, and deliverables. The seller typically delivers endorsed stock certificates, resignations of departing officers, and good standing certificates. The buyer delivers the purchase price and any required consents or approvals.

Non-Compete and Restrictive Covenants

If the seller is also a key employee or founder, the agreement often includes a non-compete clause, non-solicitation provision, and confidentiality obligations to protect the value of the business being acquired.

Signature Requirements

E-Signature Valid

Stock purchase agreements are signed by both the buyer and seller. Electronic signatures are legally valid under the ESIGN Act and UETA for commercial transactions including securities transfers between private parties.

How to Fill Out a Stock Purchase Agreement

1

Identify All Parties

Enter the full legal names and addresses of the buyer, seller, and the corporation whose shares are being transferred. If multiple sellers are involved, list each separately with their respective share counts.

2

Define the Shares Being Sold

Specify the exact number of shares, the class, the certificate numbers, and calculate what percentage of the total outstanding shares this represents. Note any existing transfer restrictions that must be satisfied.

3

Set the Purchase Price

Enter the total price, the per-share price, and the payment structure. If using an earnout or installment payments, detail the schedule, interest rate (if any), and any security for future payments.

4

Draft Representations and Warranties

Customize the representations for your transaction. Seller representations typically cover ownership, authority, financial statements, litigation, tax compliance, and material contracts. Buyer representations cover authority and ability to pay.

5

Set Due Diligence Terms

Specify the due diligence period length, what materials the buyer can access, and the consequences if due diligence reveals issues. Include a walk-away right for the buyer if material problems are discovered.

6

Define Closing Deliverables

List everything each party must deliver at closing. Create a closing checklist as an exhibit to the agreement. Set the closing date and specify whether the closing can be extended if conditions are not met.

Free Template vs Custom Stock Purchase Agreement

FeatureFree TemplateCustom (AI or Attorney)
Basic purchase agreement structure
Comprehensive representations and warranties-
Indemnification provisions-
Due diligence checklist-
Attorney review and customization-
Digital download (PDF/Word)
Closing document preparation-

Stock Purchase Agreement Template FAQ

What is a stock purchase agreement?
A stock purchase agreement is a legal contract used to transfer ownership of shares in a corporation from a seller to a buyer. It documents the number and class of shares being sold, the purchase price, payment terms, representations and warranties made by both parties, conditions that must be met before closing, and indemnification obligations. Unlike an asset purchase agreement where the buyer selects specific assets and liabilities to acquire, a stock purchase transfers the entire corporate entity with all of its assets, liabilities, contracts, and obligations.
What is the difference between a stock purchase and asset purchase?
In a stock purchase, the buyer acquires the seller's shares and becomes the new owner of the entire corporation, including all assets, liabilities, contracts, and obligations. In an asset purchase, the buyer selects specific assets (equipment, inventory, intellectual property, contracts) to acquire and typically does not assume the seller's liabilities unless specifically agreed. Stock purchases are simpler for transferring contracts and licenses but carry the risk of unknown liabilities. Asset purchases allow the buyer to cherry-pick desirable assets but may require individual contract assignments and regulatory re-approvals.
What should be included in a stock purchase agreement?
A comprehensive stock purchase agreement includes identification of the parties and shares, the purchase price and payment terms, detailed representations and warranties from both parties, a due diligence provision, conditions precedent to closing, indemnification provisions with survival periods and liability caps, closing mechanics and deliverables, restrictive covenants (non-compete, non-solicitation), confidentiality obligations, termination rights, and governing law. Exhibits typically include financial statements, disclosure schedules listing exceptions to representations, and forms of ancillary documents to be delivered at closing.
Who pays taxes in a stock purchase?
In a stock purchase, the seller pays capital gains tax on the difference between the sale price and their cost basis in the shares. If the seller held the shares for more than one year, the gain qualifies for long-term capital gains rates, which are generally lower than ordinary income rates. The buyer does not receive a step-up in the tax basis of the corporation's assets, which is a significant disadvantage compared to an asset purchase. The corporation itself continues to use its existing tax basis for depreciation and amortization. These tax implications often make asset purchases more favorable for buyers and stock purchases more favorable for sellers.
What are representations and warranties in a stock purchase?
Representations and warranties are factual statements made by the buyer and seller in the agreement that each party certifies as true and accurate. The seller typically represents that they own the shares free of liens, the company's financial statements are accurate, there is no undisclosed litigation, all taxes have been paid, and material contracts are in good standing. The buyer represents that they have authority and funds to complete the purchase. If any representation proves false, the injured party can seek indemnification for resulting losses. These provisions allocate risk and provide the legal basis for post-closing claims.
What is due diligence in a stock purchase?
Due diligence is the investigation period during which the buyer examines the target corporation's financial records, contracts, litigation, tax filings, intellectual property, employee matters, regulatory compliance, and overall business operations. The purpose is to verify the seller's representations, identify potential risks, and confirm that the business is worth the agreed purchase price. Due diligence typically lasts 30 to 90 days and involves reviewing documents in a physical or virtual data room. Issues discovered during due diligence may lead to price adjustments, additional seller representations, or the buyer exercising their right to terminate the agreement.
What is an indemnification clause in a stock purchase agreement?
An indemnification clause requires one party to compensate the other for losses caused by breaches of representations, warranties, or covenants in the agreement. If the seller represented that there was no pending litigation but a lawsuit is later discovered, the buyer can seek indemnification for any losses from that lawsuit. Indemnification provisions specify the survival period (how long after closing claims can be made, typically 12 to 24 months), a deductible or basket amount (minimum threshold before claims can be made), a cap on total liability (often 10-25% of the purchase price), and the procedures for making and resolving claims.
How long does a stock purchase take?
A stock purchase transaction typically takes 60 to 120 days from signing a letter of intent to closing, though simple transactions between known parties can close in as little as two weeks and complex acquisitions may take six months or longer. The timeline depends on the complexity of the due diligence, whether regulatory approvals are needed, the negotiation of the definitive agreement, and the time required to satisfy closing conditions. Key milestones include signing the letter of intent, completing due diligence, negotiating and executing the stock purchase agreement, satisfying conditions precedent, and closing with the exchange of shares and payment.

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Reviewed by licensed attorneys · Editorial policy · Last updated March 2026

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