Share purchases: employment issues

STOP PRESS: The Information Commissioner’s Office (ICO) has published draft guidance on keeping employment records and recruitment and selection which is open for consultation until 5 March 2024, and has also removed the employment practices code (first published in March 2022, and last updated in November 2011) and supplementary guidance from its employment information page. For more information, see Q&A: What is the status of the ICO employment practices code? and ICO removes employment practices code and related guidance from its Employment information guidance page, LNB News 15/12/2023 112. This Practice Note will be updated once the ICO draft guidance is finalised.

When a buyer is interested in acquiring a business, there are two options: either the buyer acquires the entire issued share capital of the company which owns that business (known as a 'share purchase'), or the buyer acquires the collection of assets that comprise the business, which may include eg machinery, equipment, property, intellectual property rights, employees and contracts (known as an 'asset purchase').

On a share purchase, the buyer acquires the company 'warts and all'. The company remains

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