Share Purchase Agreement – what should the agreement include?

By Mallbutiken · Facts checked October 1, 2026 · Approximately 10 minutes reading time

A share transfer agreement should describe exactly which shares are being sold, the price to be paid, the conditions that must be met before closing, and how the risk of defects in the company is allocated between the seller and the buyer. Before drafting the agreement, the parties must also check the articles of association and other relevant agreements for restrictions on the transfer.

Check transfer restrictions before locking the price

According to Chapter 4, Section 7 of the Swedish Companies Act, shares can be transferred and acquired freely unless otherwise provided by law or permitted clauses in the articles of association.

Also check any shareholders' agreements. These are contractual documents and serve a different function than the articles of association, but may contain, for example, transfer restrictions, drag-along, tag-along, or other commitments between owners. See also the guide on rights of first refusal, pre-emption, and consent.

What should a share transfer agreement contain?

1. Parties and shares

Specify the seller, buyer, the company’s organization number, number of shares, share class, and the percentage of capital and votes being transferred. If the shares are pledged or encumbered in any other way, this needs to be handled explicitly.

2. Purchase price and payment

Describe the price, when payment is to be made, and whether any portion is withheld, placed in an escrow account, or adjusted based on, for example, cash, debt, or working capital. A simple, small transaction may have a fixed price, while larger acquisitions may require a more advanced pricing mechanism.

3. Conditions before closing

List any conditions that must be met before ownership is practically transferred. This may involve consent according to the articles of association, approval from a financing bank, termination of certain agreements, or other transaction-specific conditions.

4. What happens between signing and closing

If the agreement is signed some time before closing, the parties need to decide how the company may be operated in the interim. Major dividends, new loans, investments, or other unusual measures may require specific approval.

5. Warranties

The seller's warranties describe the facts the buyer may rely on. Typical areas include title to the shares, company information, accounting, tax, agreements, personnel, disputes, intellectual property, and compliance. The warranty package should be tailored to what is actually being bought and what has been investigated. Read the separate guide on warranties, disclosure, and liability in share transfer agreements.

6. Liability rules

Determine how warranty claims are to be presented, time limits, de minimis levels, liability caps, and exclusions. A liability cap copied from another deal may be completely wrong in relation to the price and risk.

7. Confidentiality and communication

Regulate when the deal may be communicated, how sensitive information from due diligence may be used, and what applies if the deal is not completed.

8. Non-compete and other subsequent commitments

If the seller is to remain in the business, assist with the handover, or be subject to a non-compete clause, the terms need to be specifically designed and assessed based on the transaction.

Due diligence: the agreement and the examination must align

Due diligence is the buyer's examination of the company before the acquisition. The scope should be governed by size, industry, and risk. A smaller internal change of ownership does not require the same process as an external corporate acquisition.

Areas for inspection can include:

• articles of association, share register, and ownership structure,
• annual reports and current financials,
• taxes and fees,
• essential customer and supplier agreements,
• loans, collateral, and leasing,
• employment and key personnel,
• disputes and regulatory matters,
• intellectual property,
• personal data and regulatory issues,
• insurance and other significant risks.

Warranties, disclosure, and specific indemnities

If a seller's warranty has exceptions, these should be documented clearly. In larger deals, a specific disclosure letter is often used where the seller reports known deviations.

An identified specific risk can sometimes be better managed through a specific indemnity than through a broad general warranty. This could be, for example, an ongoing tax dispute or a specific claim. The design needs to be adapted to the specific risk.

Closing: create a closing checklist

On the closing date, the parties should be able to check off all obligations in the correct order. A closing protocol reduces the risk of any action being forgotten.

1. Verify that conditions precedent to closing are met.
2. Execute agreed payment.
3. Hand over any share certificates and other transaction documents.
4. Sign any board or general meeting minutes.
5. Handle departures or new officers when included in the deal.
6. Provide the company with documentation for proper updating of the share register.
7. Hand over administrative access according to a separate checklist.

Don't forget the share register

In companies that are not central securities depository (CSD) companies, the board is responsible under Chapter 5, Section 7 of the Swedish Companies Act for ensuring that the share register is maintained, preserved, and kept available. When an acquirer proves their acquisition, the board or a person authorized by the board must, as a general rule, enter the acquirer as a shareholder under Chapter 5, Section 9, while taking into account, for example, redemption rules.

The share register is therefore not just an appendix to the purchase agreement. It is the company's statutory register of owners and needs to be handled as a separate closing/post-closing action.

Settlement note and payment documentation

A settlement note can be practical to document the number of shares, price per share, total purchase price, and payment date. It does not replace the full share transfer agreement when the transaction involves warranties and other terms, but it can provide a clear financial record.

Common mistakes in share transfers

• The articles of association are checked too late. A consent or pre-emption clause can affect the entire timeline.
• The shareholders' agreement is ignored. There may be contractual commitments that must be handled separately.
• The price is stated without a pricing mechanism. The parties may mean different things by cash, debt, or working capital.
• The warranties are generic. They should reflect the company and the due diligence.
• Closing is verbal. A checklist and protocol make it clear what actions have actually taken place.
• The share register is forgotten. The owner register must be updated correctly.
• Tax is treated as a clause issue. The tax effects for the seller and buyer need to be assessed separately for the specific transaction.

Do you need to structure the entire transaction?

Mallbutiken's share transfer package contains agreements, warranty appendix, closing protocol, settlement note, due diligence checklist, and post-closing checklist in Word/PDF. Price in store: 249 SEK.

See the share transfer package

Frequently asked questions

Are shares always freely transferable?

The starting point in the Swedish Companies Act is free transferability, but the articles of association may contain permitted consent, pre-emption, or right of first refusal clauses, and other legal rules may also apply.

Is due diligence needed for a small share transfer?

The scope of the examination should be proportional to the transaction. Even a small deal may justify checking the articles of association, share register, finances, debts, and key agreements.

Is the purchase agreement sufficient to update ownership in the company?

The agreement is central evidence of the acquisition, but the company's share register must also be managed in accordance with the Swedish Companies Act, and any transfer restrictions must be followed.