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From what I understand I need to complete the stock purchase agreement inoders to fully/legally own all shares in my company. I understand that I need to fill out some sort of form or create and sign a document known as the stock purchase agreement.

I have found in my company formation documents, more specifically in the: Post-Incorporation Setup - Restricted Stock Purchase Agreement a form, under exhibit A, called the STOCK POWER. It begins:

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase Agreement between the undersigned (“Purchaser”) and CompanyName Inc., a Delaware corporation (the “Company”), dated [Date] (the “Agreement”), Purchaser hereby sells, assigns and transfers unto the Company _________________________________ (________) shares...

  • I am wondering if the blank here is the place where I would communicate somehow that I will be exchanging IP for the shares.

  • Also, is this the "stock purchase agreement" I have been needing to fill out?

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A "stock power" a.k.a. a "stock transfer" instrument is the equivalent of a deed to real estate, a bill of sale to personal property, or a signed certificate of title to a vehicle. It effects the change of ownership.

A "stock purchase agreement" is a contract in which a buyer agrees to purchase stock from a seller, but a stock purchase agreement has to be performed by executing a "stock power" or comparable instrument, in much the same way that a real estate purchase agreement sets circumstances under which a deed to the real estate will be signed at a closing, but does not actually itself transfer the real estate.

I am wondering if the blank here is the place where I would communicate somehow that I will be exchanging IP for the shares.

The stock power states: "FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase Agreement between the undersigned . . .", but the value received, if it were IP, could be described on the face of the stock power for instance stating "FOR VALUE RECEIVED, including a transfer of Patent #84847474 to the Company, and pursuant to that certain Restricted Stock Purchase Agreement between the undersigned . . ."

But, it would be more customary to set forth the nature of the consideration in the "Restrict Stock Purchase Agreement", and to be non-specific in the stock power itself.

Also, is this the "stock purchase agreement" I have been needing to fill out?

No, the stock power is not a stock purchase agreement. A written stock purchase agreement is optional, however (although you should remove any reference to it in the stock power document if there isn't a written stock purchase agreement). An agreement to buy and sell shares in a company is not subject to the statute of frauds (i.e. to a requirement that it be in writing) in any U.S. state of which I am aware (except in New York State where the "equal dignities rule" requires that transfers of stock in corporations owning real estate is subject to the same formalities as transfers of real estate), although that is not the rule in some non-U.S. jurisdictions.

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  • Given that it has not been filled out yet (except for a signature at the bottom (mine)), this document is only part of what is yet to be completed (for the stock purchase to be complete) then? – Outsider Sep 9 '19 at 0:53
  • @Outsider All you have to do is fill in the blanks about the number of shares transferred and sign it, and you are done (it wouldn't be unusual to do an exhibit to the bylaws only, although a stock power is better if you want to be fussy). If that is all you do, however, you should strike the reference to a stock purchase agreement. Also, you aren't legally required to state that IP is transferred in the stock power, although you may need to fill out another document to legally transfer the IP to the company and possibly to file that (with a government agency that keeps track of IP ownership). – ohwilleke Sep 9 '19 at 1:00

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