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Stock Purchase Term Sheet Template

Professional term sheet template for Michigan stock purchases, with comprehensive shareholder protection provisions and entity-level due diligence requirements.

Extensive
Experience
12
Core Sections
45 min
To Complete
MI Law
Compliant

Stock purchase term sheet: A professional template for Michigan equity transactions covering 12 core sections including shareholder governance, reps & warranties, and risk allocation-addressing entity-level liability inheritance, tax elections, and multi-shareholder coordination requirements.

Complete Term Sheet Structure

Section 1: Transaction Structure

Stock Purchase Details
Share classes, percentages, voting rights
Consideration Structure
Cash, stock, earnouts, rollover equity
Closing Mechanisms
Stock transfer procedures, board composition

Section 2: Corporate Governance

Board of Directors
Composition, voting, committee structure
Shareholder Rights
Information access, approval rights, tag-along
Management Terms
Employment agreements, non-compete provisions

Section 3: Reps & Warranties

Corporate Matters
Entity status, capitalization, subsidiaries
Financial Statements
Accuracy, GAAP compliance, no undisclosed liabilities
Material Contracts
Customer agreements, supplier contracts, IP licenses

Section 4: Risk Allocation

Indemnification
Survival periods, baskets, caps, escrow arrangements
Insurance & D&O
Coverage requirements, tail policies, run-off
Tax Matters
338(h)(10) elections, tax allocation, compliance

Stock vs. Asset Purchase Key Differences

Entity-Level Liability

Buyer inherits all known and unknown liabilities of the target company, requiring extensive due diligence.

View DD Checklist →

Shareholder Coordination

Multiple shareholders require unanimous or majority consent, drag-along rights, and complex tax planning.

Structure Guide →

Tax Implications

Different tax treatment for buyers and sellers, including potential stepped-up basis elections.

Analyze Tax Impact →

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