In principle, transfers of shares in UK limited liability companies will usually involve a two-step process. First, buyers and sellers enter into a contract of sale, often referred to as a share purchase agreement, in which they agree on the price at which the shares are sold and the other terms of the transfer. When part of the purchase price is retained by the buyer once completed, for example to satisfy copyright arising from the seller`s warranties and indemnities, this may be deposited into a fiduciary account with a third party such as a bank or lawyer. To this end, a mechanism will be put in place to describe trust agreements and predict when and how funds will be released. At the beginning of the SPA, the identity of the seller (sellers) and the buyer, including their addresses and registered office, is described in the case of a company or other legal person. If the business is owned by more than one shareholder, it is important that the buyer ensures that each seller is liable for the full amount of all liabilities (joint and several liability) or, if not, for the allocation of liability between the different sellers. 1. Mergers (or direct mergers) – the objective is transferred to the buyer and takes over all the assets, rights and liabilities of the target entity (the objective then ceases to exist as a separate entity); A share sale agreement is itself a private document and there is no obligation to submit it to Companies House. You should, however, inform Companies House of the change in ownership of shares in the target company`s next annual return. A typical share purchase agreement deals with the following issues: as a rule, SPAs are signed, the purchase price is paid, and shares are transferred on the same day.
There can sometimes be a delay between the exchange of contacts and the conclusion of the transaction, especially when the conditions are met before the sale can take place. The United Kingdom left the European Union on 1 January 2020 and European Union legislation applies until the end of a transitional period on 31 December 2020. The UK Government has repeatedly indicated that it would not wish to extend the transition period further. Recent statements by the Prime Minister and other senior cabinet ministers indicate that the UK government may not be able to conclude a trade deal with the EU before the end of the transition period. . . .