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Sale And Purchase Of Shares Agreement Malaysia

As with any business transaction, it`s important to know what you`re committing to and what you`re prepared for. Here is a list of the steps of the action to plan ahead and know what you expect in a business sale. Is selling your business something you imagine or plan to have one day? In any case, it helps to know what it means to sell stores in Malaysia. This article is written from the perspective of a business seller. Regardless of the size of your business, there are two common ways to sell a business, either through a “share sale” or an “asset sale.” For simplicity`s sake, this article considers that the company is owned by a limited company that is not listed on the stock exchange (i.e. a Sendirian Berhad). In essence, assets or liabilities sold to the buyer must be carefully and explicitly agreed by both parties. The seller of the business can therefore “pick cherries” by choosing to exclude a particular asset or liability during an asset sale or by retaining certain employees under the company`s employment. Since only certain elements of a business are sold, the seller may continue to be responsible for the company`s existing commitments and commitments, unless the commitments or liabilities have been transferred or reallocated to the buyer as a result of the transfer of assets (e.g. B commitments arising from existing leases, employment contracts and loans). Selling assets and selling shares can result in risks and costs for the seller. It is therefore important that a seller be informed and prepared for these aspects before entering into a transaction.

A “share sale” usually involves the sale of a company`s shares. The legitimate contractors of the share sale contract are the actual shareholder of the company (i.e. as a seller) who sells its shares in the company and the acquirer who becomes the new shareholder of the target company. On the other hand, in the case of an “asset sale” (not only limited to the sale of assets, but also liabilities and liabilities), the parties to the business sale contract are the company itself (i.e. as a seller) that sells the various components of the business owned by the company and the acquirer who becomes the new owner of the asset. The seller of shares should check whether contractual restrictions or procedures must be followed as part of a shareholder contract or whether the company`s by-laws apply before signing an agreement to sell its shares. This could include pre-emption rights or rights transferred to other shareholders of the company. What distinguishes this document from a share purchase agreement is that a share purchase agreement is used in cases where a company sells its shares, while a shareholder of the company sells shares already issued to another party as part of a share sale and sale agreement. The document requires important information, such as the parties to the transaction. B, stock description, purchase price (counterpart), parties` guarantees and guarantees, pre-compliance and post-completion requirements.

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