ALL of the provisions found in the checklist for a business purchase contract should be put into a contract for the sale of stock. In addition, to those terms, the following terms should also be included:
- Description of the number and class of stock shares that will be transferred
- The ownership percentage and voting total percentages represented by the shares described by number one of this list
- Owner of the shares warrants that he holds good title to the transferred shares free and clear and will transfer them free and clear of any liens, charges, encumbrances of any kind
- The shares are fully paid and nonassessable.
- The voting rights of the shares are not subject to any assignment of voting rights or proxies of any kind.
- The sale of the shares is not prevented or restricted by any agreement, by-law or article of incorporation (these may well exist, and thus you need to obtain a waiver)
- All federal, state, and local taxes have been paid and all returns have been filed.
- No audits are being conducted, threatened or pending.
- All financial statements presented by the company are accurate and fairly represent the financial status of the business as of the date of their preparation and there have been no material changes since that date.