A share purchase agreement (SPA) is a legal document that outlines the terms and conditions of the purchase of shares in a company. It is also a necessary document in the process of buying a business in Thailand. A Share Purchase Agreement in Thailand is useful when one party wants to acquire shares of an existing company from another party. The purpose of a SPA is to ensure that both parties understand and agree to the terms of the transaction, which can include the price, the number of shares, and any conditions or warranties regarding the shares.
- What is a Share Purchase Agreement in Thailand?
- Legal Compliance of Share Purchase Agreement in Thailand
- Conditions of Share Purchase Agreement in Thailand
- What should be mentioned in a Share Purchase Agreement in Thailand?
What is a Share Purchase Agreement in Thailand?
Share purchase agreements are in wide use in Thailand when parties want to buy or sell shares in a company. This legal document outlines the terms and conditions of the transaction to ensure that both parties are aware of their rights and obligations. The SPA must comply with the relevant laws and regulations in Thailand. Additionally, it must include certain essential provisions, such as the description of shares, purchase price, and payment terms.
The SPA may also include provisions relating to warranties and representations, indemnity, restrictive covenants, and dispute resolution. Additionally, these provisions intend to protect the interests of both parties and ensure a smooth transaction without any legal complications.
It is important to note that the SPA is a legally binding agreement, and any breach of its terms can result in legal action. Therefore, it is advisable to seek the advice of a qualified legal professional in Thailand before entering into a share purchase agreement in Thailand. A lawyer can help ensure the correct drafting of SPA, the inclusion of all necessary provisions, and the protection of your interests throughout the transaction.
Legal Compliance of Share Purchase Agreement in Thailand
In Thailand, the SPA must comply with the requirements of the Civil and Commercial Code, the Public Limited Companies Act, and other relevant regulations. The SPA must be in writing with the signatures of both parties. Additionally, it will contain certain essential provisions, like the names of the parties, the description of the shares, the purchase price, and the payment terms.
Apart from the essentials, a SPA in Thailand may also contain provisions for warranty and representations, indemnity, restrictive covenants, and dispute resolution. Moreover, these provisions can help protect the parties’ interests and prevent legal challenges after the transaction. It is important to note that SPA is a legally binding agreement. Therefore, any breach of the agreement can result in legal action. Therefore, it is crucial to seek professional legal advice before entering into a SPA.
To ensure that the SPA is legally compliant and comprehensive, engaging an experienced legal professional is advisable. A qualified Thai lawyer can assist in drafting the agreement correctly. Additionally, he/she/they can ensure the inclusion of all necessary provisions to protect the parties’ interests throughout the transaction. With the right legal guidance, both parties can enter into the SPA with confidence with the protection of their rights lawfully.
Conditions of Share Purchase Agreement
In Thailand, the transfer of shares must comply with the regulations set out in the Civil and Commercial Code. Additionally, it must comply with the Securities and Exchange Act. Some of the conditions for transferring shares in Thailand include:
1. The transfer must be done in writing
The transfer of shares must be in writing with the signature of both parties or their representatives.
2. Compliance with share transfer restrictions
Many companies in Thailand have restrictions on transferring shares. Additionally, there can be pre-emptive rights or restrictions on foreign ownership. Consequently, it is important to take into account any and all restrictions before transferring shares.
3. Approval by relevant authorities
In certain cases of transferring company shares, approval of the relevant authorities is mandatory. You have to take an approval before the transfer.
4. Payment of applicable taxes and fees
Transferring shares in Thailand may require payment of certain taxes and fees. Stamp duty and withholding tax are some of the types.
5. Compliance with anti-money laundering regulations
Thailand has strict anti-money laundering laws. Therefore, both parties must comply with these regulations when transferring shares.
Understanding the conditions of transferring shares in Thailand is crucial to ensuring a smooth transaction. Engaging the services of a legal professional can help ensure that the transfer complies with all relevant laws and regulations.
What should be mentioned in a Thai Share Purchase Agreement?
The content of a share purchase agreement in Thailand may include the following provisions:
1. Identification of the parties
The agreement should identify the buyer and the seller of the shares being transferred.
2. Description of the shares
The agreement should describe the shares on transfer. It should also include the number of shares, the type of shares, and any relevant rights attached to those shares.
3. Consideration
The agreement should specify the purchase price or other consideration being offered for the shares.
4. Payment terms
The agreement should detail the timing and method of payment for the shares.
5. Representations and Warranties
The agreement should include representations and warranties by both the buyer and the seller. These can be regarding their ownership of the shares and other relevant matters.
6. Conditions precedent
The agreement should specify all necessary conditions before the transfer, such as regulatory approvals.
7. Indemnification
The agreement should include provisions for indemnification in case of breach by either party.
8. Governing law and jurisdiction
The agreement should specify the governing law and jurisdiction to address any disputes from the agreement.
9. Signatures
The agreement should be signed by both parties and any relevant witnesses or representatives.
We recommend you to consult a reliable corporate law firm in Thailand to draft or review a Share Purchase Agreement. To help you throughout the process, our experienced team of professionals is always ready to extend their premium services. Email us your requirements at [email protected].
