If you want to sell your company, you will have to deal with various legal documents. 

One of the documents you will come across when selling your business is the Sales and Purchase Agreement (SPA). You can see this document as an end point of the negotiations between buyer and seller. 

Below we explain exactly what a Sales and Purchase Agreement is and what it contains. 

what is a sales purchase agreement

What is a Sales and Purchase Agreement? 

A Sales and Purchase Agreement is nothing but a purchase agreement. This is also the Dutch translation of the SPA. It is a legally binding legal document. So you can't just ignore it. A SPA usually involves major agreements, such as a company takeover or a long-term product purchase. 

In most cases, prior to the Sales and Purchase Agreement, a Letter of Intent prepared and a due diligence investigation performed. 

A Letter of Intent states the intentions of the buyer and seller. In a due diligence investigation, the buyer will examine the financial and legal sides of the company to be purchased. This way, the buyer can be sure that the supplied figures are correct, and he or she will not be faced with any surprises once the sale has been concluded.

What is in a Sales and Purchase Agreement?

In principle, a SPA contains all the conditions surrounding the agreement. The sales amount, the date of the transfer, but also agreements about the contracts of employees and suppliers. Furthermore, any guarantees, indemnities and liabilities are stated in a SPA. 

A SPA handles all the details of a sale. In the case of selling a business, this is very important.

Because maybe you want to sell the tangible fixed assets (such as buildings and machines), but you want to keep your brand. Or vice versa. These are all details that you have written down in a Sales and Purchase Agreement.

Who draws up a Sales and Purchase Agreement? 

A SPA can be drawn up by different parties. You can do it yourself, but you can also have it done by your financial advisor, a notary, or a lawyer. Who does it often also depends on the size of the agreement and the value of your company