With a share purchase agreement, the buyer acquires all or majority of the shares of the target company. At least in the beginning, the target company continues business operations with its previous business name and business ID. All the contracts and liabilities of the target company remain in force on original terms regardless the change of the shareholder unless there is a separate clause in an individual agreement ruling otherwise. Typically, the assets belonging to the target company are not identified in the share purchase agreement. In some cases, it might be convenient to transfer some assets from the company before the sale of the shares e.g. private property of the shareholder or irrelevant assets from the business point of view.

Because with the share purchase agreement the company will transfer under the ownership of the buyer, the buyer will also become liable for all the debts and liabilities of the target company. It is possible to address the liabilities to the person who has owned the shares of the company at the time by including seller’s warranties into the share purchase agreement.


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