How to review a share purchase agreement under English law

A share purchase agreement (SPA) transfers the shares in a company, so the buyer takes the company with all its history, liabilities and contracts. Under English law the buyer's protection comes mainly from the warranties, indemnities and disclosure process rather than from any duty on the seller to volunteer information. This checklist covers the clauses to check in a private company SPA and how to review it in Word with LexDraft.

Last checked: 17 October 2026. The law changes; check the current position before relying on this page.

This guide covers the law of England and Wales. Scotland and Northern Ireland have their own rules on several of the points below.

Clause checklist

• Price mechanics. Locked box or completion accounts. With a locked box, check the definition of leakage, the permitted leakage list and the leakage indemnity. With completion accounts, check the accounting policies hierarchy, the timetable and the expert determination process. Deferred and earn-out consideration needs clear metrics and conduct-of-business protections.
• Conditions. Regulatory approvals, third-party consents and shareholder approvals, with a long-stop date. Under the National Security and Investment Act 2021, acquisitions of control of entities active in 17 sensitive sectors must be notified and approved before completion, and a notifiable acquisition completed without approval is void (section 13). The government has announced plans to add a water sector.
• Warranties. Statements about the company: title to shares, accounts, tax, contracts, employees, property, IP, data protection, litigation and compliance. Check whether they are repeated at completion and whether they are given "so far as the seller is aware", and if so how awareness is defined.
• Disclosure. The seller qualifies warranties through a disclosure letter. Check the standard for a valid disclosure ("fairly disclosed with sufficient detail to identify the nature and scope") and whether the whole data room is generally disclosed.
• Indemnities. Specific indemnities pay pound for pound for known risks found in due diligence. A tax covenant is usual for pre-completion tax liabilities.
• Limitations on claims. De minimis, basket (and whether it is a tipping or deductible basket), overall cap, time limits for notifying claims, and exclusions for matters the buyer knew about. Fraud is usually carved out.
• Warranty and indemnity insurance. If the buyer relies on a W&I policy, the seller's cap is often set low. Check that the policy exclusions line up with the warranties.
• Restrictive covenants. Non-compete and non-solicit covenants on the sellers must be reasonable in scope and duration to protect the goodwill being bought.
• Completion deliverables. Stock transfer forms, board minutes, resignations, statutory books and Companies House filings. Stamp duty of 0.5% is charged on a stock transfer form where the consideration is over £1,000, rounded up to the nearest £5.
• Directors' transactions. If a seller is a director of the target or its holding company and the deal involves a substantial non-cash asset passing between them and the company, member approval may be needed under section 190 of the Companies Act 2006.
• Boilerplate. Entire agreement and non-reliance clauses, set-off, assignment of the benefit to a lender, and governing law and jurisdiction.

Review the share purchase agreement in Word with LexDraft

1. Open the share purchase agreement in Word, open LexDraft from the Home tab and set the jurisdiction chip to UK: England & Wales (or UK: Scotland or UK: Northern Ireland if that is the governing law).
2. Run the quick checks. They are rule-based and run without AI, catching undefined or unused defined terms, broken cross-references, numbering gaps and inconsistent capitalisation.
3. LexDraft has four built-in playbooks (NDA, SaaS MSA, DPA and services agreement) and no dedicated share purchase agreement playbook, so this runs as a general review against the governing law you chose. Use the checklist on this page to direct your own read. Findings are graded Critical, High, Medium or Low, and LexDraft flags standard terms that are missing.
4. Accept or reject each proposed redline. Accepted edits land as native Word tracked changes, ready for the other side.
5. Ask the Assistant to explain a clause in plain English or suggest wording for your side. Answers use UK spelling.
6. Look up any case you want to rely on in the Case law tab, then open the judgment on Find Case Law and read it yourself. UK judgments in LexDraft come from The National Archives' Find Case Law service, which only partially represents the activities of the courts and tribunals. Not every judgment or decision is included. Find Case Law does not include judgments from Scottish or Northern Irish courts or tribunals.

LexDraft does not give legal advice and does not summarise judgments. AI output can be wrong, so qualified counsel must check every redline before it goes out.

Common mistakes

• Warranties that are repeated at completion with no right for the seller to update the disclosure letter, or the reverse.
• A basket defined as tipping in one clause and deductible in the schedule.
• Using "Company", "Target" and "Group Company" inconsistently. The defined-term check catches this.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. LexDraft is not affiliated with or endorsed by The National Archives or any court. Spotted something out of date? Email support@lexdraft.ai and we will fix it.