SHA Restrictions On Share Transfers

During acquisition of certain part of a company's shares or establishment of a new company, the major SHA discussions happen around the restriction which will be applied for share transfers. Although the Buyer and Seller or the startup investor and angel investor may have different motives, they all want the same thing: to restrict other party's right to sell all or part of his shares.

These restrictions may be regulated in shareholders' agreement and/or the articles of association of the company. In order to be able to address these restrictions and use these arguments to third parties, it is recommended that they are contained in the company's articles of association. It is also good practice to include such regulations and/or reference to SHA provisions in a legend on the share certificate to prove and make sure that future transferees are also informed of the restrictions. That being said, since some restrictions may not be fully reflected in the articles of