Glossary · People and paperwork
Stock purchase agreement
In short
A legal document used when you buy the ownership shares (stock) of a corporation, meaning you acquire the entire existing legal entity, including its assets and liabilities.
What it means in a deal
With a stock purchase, you inherit the seller's entity, including all its past liabilities. This means more rigorous Due diligence is required to uncover potential hidden issues. The SBA loan can finance a stock purchase, but lenders often prefer an Asset purchase for its cleaner liability profile.
Related terms
Common questions about Stock purchase agreement
- Does an unfunded stock option agreement trigger affiliation for SBA 7(a) size standard calculations?
- What is the difference between an asset and stock purchase in a buyout?
- What distinguishes a cross-purchase from an entity-purchase buy-sell agreement regarding life insurance?
- How does the purchase agreement structure affect an SBA partner buyout?
- What happens if the seller terminates the purchase agreement mid-process?
- What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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