Share Sale
AdvancedA share sale is a transaction in which a buyer acquires the shares of a company, taking ownership of the whole company, including all its assets, liabilities and obligations.
In a share sale, also called a stock sale, the company itself does not change. Its contracts, employees, licences and history all remain in place. Only its owners change.
For example, a buyer purchases 100% of the shares in a logistics company. The company continues to own its trucks and warehouses, employ its staff and hold its contracts, but now under new ownership.
Share sales are often simpler than asset sales, because individual assets and contracts do not need to be transferred, although some contracts include change-of-control clauses requiring consent. Sellers often prefer them, as they can exit cleanly and may benefit from favourable tax treatment on the sale of shares.
The main risk for buyers is that they inherit all of the company's liabilities, including unknown ones, such as past tax issues, lawsuits or environmental problems. Buyers manage this risk through due diligence, warranties, indemnities, insurance and price adjustments.
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