If an organization is selling stocks, it is important to read the stock purchase agreement and be aware of the benefits, limitations and rights.
The following are some of the aspects that you would need to look for: oSecurity type: This may fall into various categories like common stock, preferred stock or bond oNumber of shares and their pricing: The price per share is mentioned along with the no.
of shares that is sold oWarranties and representations of the organization: The organization reveals the true picture of the operational state as well as the financial status of the company to the investors.
If the statement is misleading or false or breaches the details mentioned in the document, it could be a huge problem for the corporation as the organization may be sued oWarranties and representations of the investor: Through this the investor warrants various factors that the purchaser needs to be aware of.
Some of them include he / she has the knowledge or experience required for evaluation of the investment adequately, was given the opportunity to review the documents requested and knows that the stock is not transferable freely and.
oCovenants section are the promises made by the company about its expected performances to the investors oConditions section deals with the various certificates or letters to be delivered on closing the deal oClosing date section would mention the venue and date where the closing is scheduled to occur.
Along with this, it mentions how the money and any other considerations would be delivered to the organization