Drafting of sale of share agreements – Important considerations

This article first appeared on GoLegal, co-authored by De Wet De Villiers. Click below to read the full article.

In this article, we have a high-level look at some of the important aspects that must be kept in mind when drafting a sale of share agreement.

To understand a Sale of Share transactions and especially more complex transactions where, for example, risk and benefit passes on a date that differs from the date that ownership passes, one needs to go back to the basics.

A share in a company consists of a bundle of personal incorporeal rights against the company. These bundles of rights are “transferred” by way of cession and it is possible for rights against the company to “transfer” at different stages between the Seller and the Purchaser.

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