For buyers, investing in shares can be an excellent way to build your wealth. When you buy shares in a company, you become a partial owner of that business and are entitled to a share of the company’s profits, known as dividends. On the other hand, selling shares in a business can generate cash for new investments, fund expansion, or cushion retirement.
However, to ensure your transfer of shares goes smoothly, the buyer and seller should enter into a share purchase agreement. A share purchase agreement is a legal document a buyer and seller may use to transfer ownership of company shares. This differs from an asset purchase agreement, where business assets are transferred instead of shares.
A good share purchase agreement sets out the terms of the sale, so both parties know their rights and obligations under the contract. However, the clauses and language of each share purchase agreement differ significantly depending on your needs, industry, and company size. Therefore, it is prudent to work with a corporate lawyer so you can enter the share transfer transaction with clarity around its outcomes, take steps to protect your interests, and ensure a smooth closing.GET IN TOUCH