Stock Purchase Agreement

A stock purchase agreement is a legal document made between a shareholder and the startup company, which regulates the transfer and sale of the startup’s stock to the shareholder. A stock purchase agreement will determine how much stock will be purchased, the price of the stock, and how the payment will be made (cash, IP, or another form or combination of consideration).

Stock purchase agreements come in two forms: Non-restricted and Restricted. Non-restricted stock purchase are the normal stock purchase agreements: You pay for your shares, they are yours. Restricted stock purchase agreements are used when a co-founder’s shares will vest over time.