Frequently Asked Questions
You must enter into a contract known as a SHA whenever you engage in any investment transaction in which you purchase shares of a firm (either by purchasing shares from current shareholders or by subscribing to new shares).
A post-investment revision to the articles of association (AoA) is necessary to give effect to the provisions of the SHA.
An agreement that regulates the inter-shareholder interactions is known as a shareholders agreement (SHA). It listed the stockholders’ significant rights and duties.
A Share Subscription Agreement (SSA) is a contract that a new investor and the firm enter into so that the corporation can issue the investor with new securities.
An arrangement called a share purchase agreement (SPA) is made between a new investor and an existing (or departing) investor. The existing investor transfers all or a portion of its interest to the new investor through the SPA.
In contrast, a new security is issued to the investor in an SSA, but a share transfer agreement (SPA) involves an existing investor transferring his ownership interests to a new investor. In the event of an SPA, the corporation is only a passive party. The firm is the active party in SSA, nevertheless. In contrast, whether a new security is being issued or an existing security is being transferred, a SHA is entered.