A stock purchase agreement is a contract in which the owner of shares or stock in a company (a person, entity, or the company itself) sells some or all of the shares to another person or entity. Stock purchase agreements are often used when the majority ownership interest in a company is acquired by another person or entity. For more information on the transfer of ownership of companies, see the Common Legal Topic on mergers and acquisitions.
In Texas, a stock purchase agreement is a legal document that outlines the terms and conditions under which shares of a company are sold and transferred from the seller to the buyer. This agreement typically includes details such as the number of shares being sold, the price per share, representations and warranties of both parties, and any conditions precedent to the closing of the transaction. Texas law requires that such agreements be in writing to be enforceable under the Statute of Frauds (Tex. Bus. & Com. Code § 26.01). Additionally, the Texas Business Organizations Code governs the transfer of ownership interests in companies and provides the legal framework for stock purchases, including any necessary corporate approvals and adherence to the company's governing documents. When a majority ownership interest is acquired, it may trigger specific legal and regulatory requirements, such as filing a notice with the Texas Secretary of State or complying with federal securities laws, depending on the size of the transaction and the type of company involved. It is advisable for parties involved in such transactions to consult with an attorney to ensure compliance with all applicable laws and regulations.
