What is a share transaction?

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In a share transaction, the buyer acquires the shares of the target company. Unlike in a business acquisition, the acquired company will continue to operate, at least initially, under its former name and business ID. Notwithstanding the terms of the individual agreements, all agreements and liabilities of the target company will remain in force under the previous terms, notwithstanding the change of ownership.

 

What is bought in a share  transaction?

Thus, the transaction book does not usually specify which assets are included in the subject of the transaction. In some cases, however, it is necessary to transfer, for example, the owner's personal property or property that is irrelevant to the business from the target company prior to the transaction.

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Who is responsible for the target company after the transaction?

When purchasing the entire share capital of the target company, the target company will be transferred to the ownership of the buyer in the share transaction. The share deed often seeks to take into account the allocation of liability to the party who has owned the target company from time to time through warrants of the seller.