Stock Purchase Agreement Buyers Form: Fill & Download for Free

The sale would be a relatively simple private stock sale. It would be done under a pretty simple stock transfer (or sale) agreement between the buyer and the seller and, usually, the company. (But see * below.)There's no magic to this, and it isn't complicated. However the sale would need to comply with all existing stock transfer and other restrictions (such as rights of first offer, blanket transfer restrictions, legal opinion requirements, etc) that may exist under the company's corporate governing documents and the original stock purchase agreement. It would also need to comply with all applicable securities laws. Additionally, depending on who the buyer of the stock is and whether it is affiliated with the company, the sale may have tax consequences that wouldn't be obvious to the typical seller (such as ordinary income tax rates on some or all of the sale proceeds depending on a number of factors).As a result, although legally the sale isn't complicated and can be readily accomplished, it should only be done in close consultation with company counsel (and perhaps seller's counsel if the amounts at stake are large). It will be routine for an experienced counsel, but very difficult for someone who doesn't know what they're doing.Also note:Series FF Stock or Class FF Stock only makes this slightly easier. The sale of FF stock also needs to meet all the requirements above. The biggest two differences between having FF Stock and simple Common Stock are that some of the above is pre- agreed and the tax consequences can be ameliorated because the FF stock usually flips into a more valuable form of stock.I reference securities laws above: The sale itself would have to be qualified under the securities laws, which means it would either have to be registered in a public offering (something that would not happen in the circumstances you describe) or it would have to be exempt from the registration requirements. The exemption usually cited here is a pretty complicated one (e.g. Rule 144: Selling Restricted and Control Securities or Section 4(1 and 1/2) under the Securities Act of 1933), but in general if the buyer is an "accredited investor" (see Accredited Investors), and the shares were acquired by a founder in a typical founder stock purchase, the sale should qualify for an exemption. This is more complicated than I've explained -- so, again, consult with an attorney.Update to mention Jason M. Lemkin's answer: *Jason's absolutely right, if the goal is for the company itself to give the founder liquidity, the venture loan structure he describes is often discussed. It isn't a sale of the stock and does have some downsides too. I took this question to be pretty mechanical, and focused on how, once you've decided on a sale to a private party, how would that be documented and how to ensure you complied with securities laws. Someone should ask a separate question - "What's the best method for a founder to get liquidity and what are the pro's and cons?"

There are 3 key areas that buyers and sellers focus on most and where M&A deals usually fall through in my experience:Valuation - the price the buyer is willing to pay for the seller company or assetsStructure - how consideration is offered (eg, cash, stock) and when (upfront or delayed)Allocation of risk - how much risk in the form of potential liabilities or value reductions that sellers accept vs want to shift to buyers via representations, warranties and indemnifications in the purchase agreementThis presupposes the buyer and seller have already done preliminary investigation to verify strategic and organizational fit between the companies, that the buyer has the ability to pay for the seller company, and that the deal can get necessary shareholder and gov't approvals, as those are also hurdles though not as typical as the first three reasons regarding why M&A negotiations fall apart.

By asking this question, it is likely that your company hasn’t been formed yet. If so, it would be easier to just grant them stock. If your company already exists, you would need to create an equity incentive plan and then grant them non-statutory stock options. Anything that dilutes existing shareholders will require board approval though.But I think you meant to ask, “how do I sell shares to friends and family?” It’s pretty simple to sell common stock in the very beginning when you are the founder and only shareholder. It isn’t much more than forming the company with an initial allocation of shares. The stock purchase agreements can be as simple agreements from templates that cite the pertinent security laws and the buyers represent that they know what they are doing and can afford to lose their money. The more important issue is planning your equity allocation and share pricing to accommodate enough investors and employees to reach your goals.