Share Purchase Agreement Mechanism

Nevertheless, there are certain essential elements contained in each PPS: in order to reduce its risk, it is customary for the buyer of a private company to receive from the seller a form of insurance relating to the assets and liabilities of the company. It is generally accepted that the main purpose of collateral in a normal share purchase agreement is to attract the attention of sellers, probably with respect to the buyer. The safeguards-based verification process is designed to highlight any potential issues. The parties then begin to negotiate, before the sale, the impact they will have on the sales activities. This will reduce the possibility of litigation that will arise once completed. A shareholder has the prima facie right to transfer his shares whenever and to whomever he wants. This freedom may, however, be considerably restricted by the provisions contained in the Articles . . .

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