{"id":10574,"date":"2018-09-20T13:01:34","date_gmt":"2018-09-20T07:31:34","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=10574"},"modified":"2021-01-04T14:31:09","modified_gmt":"2021-01-04T09:01:09","slug":"share-purchase-agreement-in-case-of-nbfc","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/share-purchase-agreement-in-case-of-nbfc\/","title":{"rendered":"What is the Share Purchase Agreement in Case of NBFC?"},"content":{"rendered":"

Share Purchase Agreement in case of NBFC<\/a> formal agreement that is signed between the buyers and sellers to affect the sale and purchase of the shares. They are like other formal contracts that are made between the parties in any formal transfer of thing in the course of business.<\/p>\n\n\n\n

In layman language, a Share Purchase Agreement<\/strong><\/a> (SPA) is an agreement that is signed between two parties the seller and the buyer at a fixed purchasing Price. The seller agrees to sell the mentioned number of shares at a specific price to the buyer. The main goal of the share purchase document is to demonstrate that the terms of the agreement were commonly settled by both the seller and the buyer. Such an agreement specifies the number and the number of shares to be sold, the conditions precedent, and the agreements by the two parties. The shares will then be dispensed after this Share Purchase Agreement<\/strong> has been signed.<\/p>\n\n\n\n

What is the Share Purchase Agreement in case of NBFC?<\/h2>\n\n\n\n

Now, the share purchase agreement in case of  NBFC means an agreement generated between the two or three parties affecting the transfer of shares. The Share Purchase agreement defines the terms and conditions that are to be followed by both the parties engaged the contract of transfer of the share in case of NBFC.<\/p>\n\n\n\n

You must have the NBFC Registration<\/a><\/strong> to conduct any activity like transfer of shares. Without having NBFC Registration in India you cannot be a party to any contracts or agreement for a share of the transfer. If the buyers are like the shell companies who are created only for the purpose of effecting Share Purchase Agreement which lacks financial or administrative credibility then the head of the company will act as a Guarantor to ensure payment or compensation in case of fraud or non- payment.<\/p>\n\n\n\n

Generally, the securities of the company are free transferrable though there is maybe a certain restriction that is imposed on the transferring of shares of the Private Company as provided in their articles. According to the Section 56 of the Companies act 2013, any company who is registered under Companies act 2013 can transfer the shares or other securities only when a proper instrument of transfer of shares is filed in the prescribed Form SH- 4.<\/p>\n\n\n\n

Also Read:<\/b> Sample Format of Sale Purchase Agreement (SPA)<\/a><\/mark>.<\/p><\/div>\n\n\n\n

The form SH-4 shall be filed to registrar within the 6o days from the date of execution of shares transfer agreement along with Share Purchase Agreement and share certificate relating to the securities.<\/p>\n\n\n\n

Now, NBFC within one month from the date of receipt of the Share Purchase Agreement send share transfer certificate to the party. NBFC registered with RBI has much compliance that asked to be followed at the time of any transfer of shares.<\/p>\n\n\n\n

Some Definition under Share Purchase Agreement in case of NBFC<\/h2>\n\n\n\n