Share purchase agreement (SPA) for an ApS or A/S

When do you use a share purchase agreement?

In a share deal the buyer purchases the company itself, a Danish private limited company (ApS) or public limited company (A/S), by acquiring its shares. Everything in the company comes with it: contracts, employees, domains, permits, bank accounts, receivables and debt. The company changes owner but remains the same legal person, so customers, suppliers and the landlord generally keep the same counterparty as before.

That makes the deal simpler to complete than an asset deal, because contracts do not have to be assigned one by one. In return, the buyer also takes on the company’s past: tax, disputes, warranty claims and liabilities no one has discovered yet. That is why seller warranties, the tax indemnity and due diligence carry more weight in a share deal.

If the business is owned personally, or the buyer only wants part of it, it is usually an asset deal, and you need the asset purchase agreement. The choice has a big impact on the seller’s tax and the buyer’s risk; see the seller’s guide chapter on asset or share sale, and involve your accountants early.

What the template contains

• Parties, background and the shares: who sells how many shares, and that they are free of charges and third-party rights.
• Price and price mechanism: a fixed price, a locked box (the price is fixed on a balance sheet before signing, and the seller may not take money out in the meantime) or completion accounts, where net debt and working capital are calculated as at the closing date.
• Payment and closing: what must happen and be handed over on the closing date, such as the register of shareholders, new management, resignations and registration with the Danish Business Authority (Erhvervsstyrelsen).
• Passing of risk and the buyer’s investigation: when risk passes to the buyer, and what due diligence means for the seller’s liability.
• Seller’s warranties: detailed warranties on the company, accounts, tax, contracts, employees, IT, rights and disputes.
• Tax indemnity: the seller covers tax relating to the period before the takeover.
• Liability and limitation of liability: de minimis threshold, cap and time limits for claims.
• Non-compete, non-solicitation of customers and staff, and the seller’s continuing role.
• Confidentiality, costs, notices, governing law, dispute resolution, appendices and signatures.

Points to watch

• Locked box or completion accounts: a locked box is simpler and gives the seller price certainty, but needs a reliable balance sheet and a clear definition of what the seller may not extract (leakage). Completion accounts give a more precise price but require a post-closing calculation the parties can disagree on. Have an accountant review net debt and working capital before the price is fixed.
• Warranties: a broad warranty that the accounts give a true and fair view and that there are no hidden liabilities is normal for a buyer. The seller, in turn, should disclose everything known in a disclosure schedule so it cannot be raised as a warranty breach later.
• Limitation of liability: typically the parties agree a de minimis threshold for small claims, an overall cap and a time limit for claims, while tax and title to the shares often have longer limits. What is reasonable depends on the deal and on what due diligence has shown.
• Change of control: review the company’s material contracts, including the lease, for clauses allowing the counterparty to terminate on a change of ownership. The lease stays with the company but may contain such a clause.
• Articles of association and shareholders’ agreement: check pre-emption rights, consent requirements and transfer restrictions before signing. Other shareholders may have rights that need to be waived.
• Tax: the seller is usually taxed on the gain on the shares, and it can make a significant difference whether they are held personally or through a holding company. Any restructuring must take place well before the sale. Speak to your accountant and do not sign until the tax has been worked out.
• Employees: employment simply continues because the employer is the same company. The Danish Transfer of Undertakings Act therefore does not normally apply to a pure share sale, but terms, bonus schemes and notice periods still need to be known.
• Non-compete: it must be reasonable in time, geography and scope to be enforceable. If the seller stays on as an employee, special rules apply to restrictive covenants in employment, so speak to a lawyer.

Online and physical businesses

For a SaaS business, online shop or app held in a company, check that domains, source code, app store accounts, payment providers and ad accounts are actually registered to the company and not to the owner personally. If they are not, they must be transferred separately, and the agreement must say so. Customer data stays in the company, but the GDPR still applies during due diligence, so share anonymised extracts where possible. Read more in the seller’s guide chapter on the handover and the time after.

For a restaurant, shop, manufacturing or transport business, premises, leasing agreements, the vehicle fleet, permits and regulatory matters are the big items. Some permits and licences can be tied to a named person, such as the day-to-day manager, and may need to be applied for again. The chapter on physical businesses includes a checklist.

Paying the purchase price

Sitavo does not handle the purchase price. The parties agree payment themselves, typically by bank transfer on the closing date against delivery of the register of shareholders and signed documents, often through a lawyer’s client account. The template has room for seller financing and an earn-out if part of the price is paid later.

How to use the template on Sitavo

The share purchase agreement is available to you if you have an active or pending listing or an ongoing deal on Sitavo. You fill it in with the editor in your account, where parties, company and price can be taken from the listing or deal, edit the wording directly and download it in Word or PDF. The agreement text itself is in Danish, as the deal is governed by Danish law. If you trade through Sitavo, you can also buy the legal package, where the agreement is filled in with the deal’s details and approved by both parties in the deal process.

The usual order is a letter of intent, then due diligence and then the purchase agreement. A share deal involves more legal and tax detail than an asset deal, so have a lawyer review the agreement, ideally with separate advisers for each party. Read the seller’s guide chapter on the purchase agreement, or find an adviser through Sitavo’s adviser directory.