Share Purchase Agreements
Expert guidance on share acquisitions and disposals.
Share purchase agreements are complex transactions that require careful legal structuring and due diligence. Whether you are buying or selling shares in a company, the terms of the agreement will have significant implications for all parties.
At Duan & Duan UK LLP, we guide clients through every stage of share purchase transactions, from initial negotiations and due diligence through to completion and post-completion matters.
Our SPA Services
We advise on transaction structuring, due diligence, warranty and indemnity provisions, completion mechanisms, and post-completion adjustments.
Practice lead
Share purchase transactions are led by Leon Chua, Partner at Duan & Duan UK LLP. Leon has advised acquirers on the purchase of UK operating businesses across multiple sectors, including warranty and indemnity negotiation, disclosure, W&I insurance, and post-completion integration. His contentious experience means he also acts in post-completion breach-of-warranty and asset-purchase-agreement disputes, including the Commercial Court proceedings in HungryPanda AU Pty Ltd v Yan Liu [2025] EWHC 1512 (Comm) (£11.7m damages judgment).
Frequently Asked Questions
What is a share purchase agreement (SPA)?
A share purchase agreement is the principal contract governing the sale of shares in a target company from seller to buyer. It contains the sale mechanics (price, payment, completion), warranties and indemnities from the seller, tax indemnity (usually by separate deed), restrictive covenants, and conditions precedent. A well-negotiated SPA determines who bears the risks of problems discovered post-completion.
What is the difference between warranties and indemnities?
Warranties are statements of fact given by the seller about the target company; breach gives rise to a damages claim, subject to caps, time limits, and disclosure. Indemnities are promises to reimburse the buyer pound-for-pound for specific, identified risks — typically used for known problems revealed in due diligence. Warranty claims are reduced by anything disclosed in the disclosure letter; indemnities normally are not.
What is Warranty and Indemnity (W&I) insurance and should we use it?
W&I insurance covers the buyer (or seller) for liability arising under the warranties in the SPA. It can unlock deals where the seller will not give meaningful warranty protection — for example private equity exits, estate sales, or cross-border deals. The policy has exclusions (typically: matters known to the buyer, tax where a separate deed applies, forward-looking warranties) and needs careful negotiation alongside the SPA.
What due diligence is typical for a UK SPA transaction?
Legal due diligence covers corporate structure and title, material contracts, employees and pensions, real estate, intellectual property, data protection (UK GDPR), litigation, regulatory consents, and tax. Financial and commercial due diligence are run by accountants and industry consultants. For cross-border deals into the UK involving Chinese groups, particular attention is paid to sanctions, beneficial ownership, and PSC compliance.
What is a completion accounts vs locked-box mechanism?
Under completion accounts, the price is adjusted after completion against actual figures (working capital, net debt, cash). Under a locked-box, the price is fixed by reference to a historic balance sheet with a leakage-prevention regime between that date and completion. Locked-box is faster and simpler; completion accounts give a more accurate final price. The choice depends on sector, deal size, and bargaining power.
What if the seller has breached a warranty after completion?
The buyer gives notice in accordance with the SPA (usually within 18–24 months for general warranties, longer for tax and title), quantifies the loss, and negotiates settlement. If unresolved, the claim is typically litigated in the High Court, or arbitrated if the SPA so provides. Leon Chua has acted in Commercial Court proceedings arising out of asset-purchase agreements with cross-border elements — see HungryPanda AU Pty Ltd v Yan Liu [2025] EWHC 1512 (Comm) (£11.7m damages).