The class of common or pre-weighted shares may affect the shareholder`s share of the company`s profits or the amount it receives when the company is liquidated and whether a shareholder has voting or non-voting shares, decides whether or not the shareholder has the right to vote at shareholder meetings. A share purchase agreement is itself a private document and it is not necessary to submit it to Companies House. However, you should inform Companies House of the change in the holding of shares in the target company`s next annual performance. When someone sells their shares in a business, they often hope for a clean break. However, as some of the company`s liabilities – particularly the tax – are not disclosed until after the transaction, buyers must ensure that outgoing owners remain on the hook, and this is one of the main objectives of the main sales document, the share purchase contract. 3. Reverse triangular mergers – the buyer`s subsidiary merges for the purpose (the target survives and the buyer`s subsidiary ceases to exist). Since once completed, the buyer acquires ownership of the shares, he also acquires all the debts related to the objective. The purchaser will endeavour to ensure that he receives a „full title guarantee” from representations, guarantees and commitments made in a G.S.O. that will survive the execution and delivery of the BSG and the closing of the transaction, and extend it beyond the closing of the transaction.
Some misrepresentations and breaches of the warranty may not be visible until after completion. The survival of representations, guarantees and pacts (as well as compensation terms) beyond the conclusion of the transaction protects the buyer if he receives less than he negotiated. However, the parties should carefully consider the existing legislation of the OSG to determine how the jurisdiction assesses and imposes statutes of limitations. Some jurisdictions prohibit exceeding contractual rights beyond the jurisdiction`s statute of limitations, even if the parties to a CSE explicitly agree on a language of survival that allows a right to the infringement to go beyond the jurisdiction`s statute of limitations. While you can modify a SPA model, the advantage of involving corporate lawyers in the design and negotiation of the share purchase contract is that they can help ensure that they reflect a fair and commercial distribution of the risk of the transaction between the buyer and the seller. With a lawyer, you can also protect yourself from the discoveries and painful debts of resale.