Stock Purchase Agreement Template, Free Download 2026

By Jessica Henwick, Editor-in-ChiefLegally reviewed by David Chen, Esq.
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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 share purchase agreement form 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 a stock purchase agreement sample document outlining the terms and transfer mechanics, including endorsed stock certificate template.

Your corporation is acquiring another company through a stock purchase (as opposed to an asset purchase), and the buyer needs strong 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.

⚠ Warning: Stock sales must comply with federal securities laws. Selling shares without proper registration or a valid exemption (such as Regulation D, Rule 506) can result in SEC enforcement action, rescission liability, and personal penalties for officers and directors.

Drafting Note: For acquisitions, a stock purchase transfers ownership of the entire entity, including all assets, liabilities, contracts, and potential lawsuits. An asset purchase allows the buyer to cherry-pick specific assets while leaving unwanted liabilities behind. The structural choice carries significant tax implications for both parties, sellers generally prefer stock sales for capital gains treatment under IRC Section 1202, while buyers often prefer asset purchases for the stepped-up basis under IRC Section 1060.

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, consistent with SEC disclosure requirements for private securities transactions.

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 (including IRS tax clearance where applicable), 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 board should also prepare corporate minutes documenting the approval of the transaction. 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.

Legal Details: Key Clauses in a Stock Purchase Agreement

Parties
1.1

This Stock Purchase Agreement (this "Agreement") is entered into by and between [____________] ("Seller") and [____________] ("Buyer"). Seller is the record and beneficial owner of [____________] shares of [Common / Preferred] Stock (the "Shares") of [____________] (the "Company"), a [_____________] corporation.

Purchase and Sale
2.1

Seller agrees to sell, assign, transfer, and deliver to Buyer, and Buyer agrees to purchase from Seller, the Shares free and clear of all liens, encumbrances, and restrictions except applicable securities laws and restrictions expressly assumed by Buyer.

Purchase Price
3.1

The aggregate purchase price for the Shares shall be [$__________] (the "Purchase Price"), representing [$__________] per share, payable at Closing by wire transfer of immediately available funds. The Purchase Price has been determined by [mutual agreement / independent valuation / book value].

Closing
4.1

Closing shall take place on [____________] at [____________]. At Closing, Seller shall deliver stock certificates duly endorsed for transfer and Buyer shall deliver the Purchase Price. Each party shall deliver such other documents as may be reasonably required.

Seller Representations
5.1

Seller represents and warrants that: (a) Seller is the sole owner of the Shares; (b) Seller has full authority to sell and transfer the Shares; (c) the Shares are free and clear of all liens; (d) there are no outstanding options, warrants, or rights to purchase the Shares; (e) execution will not conflict with any agreement binding on Seller.

Buyer Representations
6.1

Buyer represents and warrants that: (a) Buyer has full authority to execute this Agreement; (b) Buyer is acquiring the Shares for investment only; (c) Buyer is an "accredited investor" as defined in Rule 501 of Regulation D; (d) Buyer has reviewed the Company's books and records; (e) Buyer understands the Shares are unregistered and subject to transfer restrictions.

Conditions Precedent
7.1

Closing is subject to: (a) truth and accuracy of all representations as of the Closing Date; (b) receipt of all necessary consents including Board approval and shareholder waiver of preemptive rights; (c) no pending legal proceedings prohibiting the transaction; (d) compliance with any Shareholder Agreement.

Indemnification
8.1

Each party shall indemnify the other against all losses arising from any breach of their respective representations, warranties, or obligations under this Agreement. Claims must be made within [one (1)] year of the Closing Date.

Governing Law
9.1

This Agreement shall be governed by the laws of the State of [_____________]. This Agreement constitutes the entire understanding between the parties, may be executed in counterparts, and may be amended only in writing signed by both parties.

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.

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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. Cross-reference the stock certificate template numbers being transferred.

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
Full representations and warranties-
Indemnification provisions-
Due diligence checklist-
Attorney review and customization-
Free stock purchase agreement template download (PDF/Word)
Closing document preparation-

Key Facts About Stock Purchase Agreement Documents

Stock purchase agreement transfers ownership of company shares from seller to buyer.

Buyer assumes all liabilities in stock purchase unlike asset purchase.

Securities Act Section 4(a)(2) provides private placement exemption for stock sales.

Representations and warranties allocate risk between buyer and seller in the transaction.

IRC Section 338(h)(10) election allows stock purchase to be treated as asset purchase for tax purposes.

Key Legal Terms in a Stock Purchase Agreement

stock purchase agreementasset purchase agreementrepresentations and warrantiesdue diligenceindemnificationescrowclosing conditionsSecurities Act Section 4(a)(2)Regulation DIRC Section 338(h)(10)material adverse changenon-compete covenantdisclosure schedules

When a Free Template Is Not Enough

Free templates cover standard situations, but a professionally drafted stock purchase agreement accounts for state-specific requirements, unusual circumstances, and enforceability considerations that generic forms miss. If your situation involves significant assets, complex terms, or potential disputes, request an attorney-drafted stock purchase agreement with a custom quote based on your situation.

Stock Purchase Agreement Template FAQ

What is a stock purchase agreement?
A stock purchase agreement, also called a share 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 thorough stock purchase agreement - whether structured as a share purchase agreement form for a single investor or a multi-party acquisition document - 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 <strong>indemnification</strong> 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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