Share Purchase Agreement UK: Template for a Private Limited Company

A share purchase agreement (often shortened to SPA) records the sale of shares in a company from the current shareholders to a buyer. The company itself does not change: it keeps its contracts, staff, debts and tax history, and only its owners change. That is the main difference with an asset purchase, where the company sells its business and assets and the buyer picks and chooses what it takes over. In a share sale, the buyer acquires the company with all its liabilities, known or not, which is why the warranties and the disclosure letter carry so much weight.

The agreement is a private contract, but it does not transfer the shares on its own. Legal title passes when the company enters the buyer in its register of members, and the company may only do so once it receives a proper instrument of transfer, in practice HMRC's stock transfer form signed by each seller. The SPA comes first and governs those forms: it fixes who sells what, for how much, on which conditions, and what happens if a statement about the company turns out to be wrong.

The transfer mechanics come from the Companies Act 2006. Under section 770, a company may not register a transfer of shares unless a proper instrument of transfer has been delivered to it. Section 771 then gives the company two months after the transfer is lodged to register it or to tell the buyer why it refuses, and section 776 gives the same two months to issue a new share certificate. The register of members itself is governed by section 113. Since 18 November 2025, the Economic Crime and Corporate Transparency Act 2023 has removed the company's own registers of directors and of people with significant control: changes now go straight to the registrar within 14 days of the change for directors (section 167G) and of the company's confirmation of it for PSCs (sections 790LA and 790LF). An individual also must not act as a director until his or her identity has been verified with Companies House (section 167M).

Stamp duty is the tax point every buyer meets. Paragraph 3 of Schedule 13 to the Finance Act 1999 sets the rate at 0.5% of the consideration, and section 112 rounds the duty up rather than down. Small transfers certified at the statutory threshold are exempt. HMRC explains the current electronic process in its guidance on paying Stamp Duty on shares transferred with a stock transfer form: the buyer emails the signed form and pays within 30 days of the date the form was signed, and HMRC replies with a letter confirming that the form is duly stamped.

Finally, the National Security and Investment Act 2021 requires the buyer to notify the Secretary of State before gaining control of a company active in a sensitive sector listed in regulations, such as defence or energy, and section 13 makes an acquisition completed without approval void.

The classic case is the retiring founder who sells 100% of the shares to a larger competitor, resigns at completion and agrees not to compete for two years. Because the company keeps its contracts and employees, customers barely notice the change, which is usually the point of choosing a share sale over an asset sale. Where other owners remain, the shareholders' agreement for UK private companies often decides whether a sale needs everyone's consent.

Partial sales are just as common: one of three shareholders leaves and sells to a co-shareholder or to a newcomer, or a family brings in a minority investor. Here the waiver of pre-emption rights becomes the first practical issue, and the template requires written waivers from every shareholder who is not selling. Management buyouts through a new holding company use the same structure, often with a deferred consideration because the managers cannot raise the full price on day one.

A sale of a defence subcontractor or a data centre business can fall within the national security regime, so signing and completion must be split and the deal made conditional on clearance.

The opening clauses identify the sellers, the buyer and the company, list each seller's shares in Schedule 1 and set the price. You choose between payment in full at completion, payment by instalments with an acceleration clause if the buyer defaults or resells, and a fixed price plus a single earn-out sum payable if the company reaches a target that you define for a named financial year. The price is fixed, with no completion accounts mechanism, and payments are split between the sellers in proportion to their shares.

Schedule 4 carries the buyer's protection. Title and capacity warranties are always given: each seller owns its shares free from any charge and has the power to sell them. You can add nineteen business warranties covering the accounts, employees, property, contracts, data protection, disputes and tax, all qualified by a disclosure letter, and an optional tax covenant under which the sellers pay any pre-completion tax not provided for in the accounts. The limitations clause then sets a minimum claim, a threshold, a cap and a time limit of 12, 18 or 24 months, with seven years for tax. Where there are several sellers, you decide whether their liability is several (each pays its share) or joint and several. Fraud is never capped.

The sellers' personal commitments come next. Restrictive covenants of 12, 24 or 36 months stop the sellers from competing, poaching customers or hiring key staff, and must stay reasonable to be enforced, as our page on UK restrictive covenants and the Tillman test explains. Seller loans are repaid at completion, personal guarantees given to the bank or landlord are released or indemnified, and outgoing directors resign by deed.

You start with the sellers: how many there are, then each one's name, address and number of shares. A company can be a seller or the buyer, so the form asks for its registered name and company number. Next comes the company itself, with its registered office, a short description of its business and its issued share capital as shown at Companies House; a partial sale automatically adds the pre-emption waivers to this UK share purchase agreement.

The price screen asks for the fixed price and how it is paid, then opens the instalment or earn-out questions only if you need them. You then say whether any third-party consent is required and whether completion happens on signing or later, once conditions are met; the national security question only appears in the second case. The warranties screen lets you choose the level of protection, and the limitation figures follow. The last questions cover restrictive covenants, directors resigning or joining, seller loans, personal guarantees and whether you sign as a simple contract or as a deed.

Even a well-drafted share purchase agreement UK template transfers nothing on signature, and forgetting it is the most expensive mistake. Nobody sends the stock transfer forms to HMRC, the register of members is never updated, and the buyer never becomes the legal owner. The 30-day stamp duty deadline runs from the date each form is signed, and interest and penalties follow if it is missed. Another classic is the disclosure letter written in an afternoon: a vague general disclosure will not protect the sellers, because only matters fairly disclosed with enough detail to identify their nature and scope count. Check also that the articles do not give the other shareholders a right to buy first, using our articles of association template for UK companies as a reference for typical transfer provisions.

On the people side, sellers who are also employees often resign as directors with a one-line letter and assume their employment claims disappear with it. They do not: statutory employment claims can only be settled by a valid settlement agreement signed after independent advice, or through ACAS conciliation, which is what our UK settlement agreement is for. Buyers forget the lease: read its change of control provisions before signing, as explained alongside our commercial lease template under the 1954 Act, and get the landlord's consent in writing where the lease requires it. Finally, do not forget capital gains tax: Business Asset Disposal Relief is a personal claim that each individual seller makes on his or her Self Assessment return or on HMRC's claim form.