What is a share sale?

Prepare for the ATT Law Exam. Practice with multiple choice questions, each providing hints and explanations. Be well-prepared for exam day!

Multiple Choice

What is a share sale?

A share sale is about transferring ownership of a company through the sale of its shares. When a shareholder sells all or most of their shares to a buyer, the buyer becomes the new owner of those shares and, with them, the rights that come with share ownership (such as voting rights and rights to profits). The company itself remains the same legal entity; what changes is who holds the ownership stakes. This option matches that idea precisely: the seller transfers their shares to a purchaser, who then becomes the new shareholder. The other scenarios describe different things: selling all of a company’s assets is an asset sale, not a share sale; borrowing funds using shares as collateral is a loan arrangement; and listing on the stock market refers to an initial public offering, not the sale of existing shares.

A share sale is about transferring ownership of a company through the sale of its shares. When a shareholder sells all or most of their shares to a buyer, the buyer becomes the new owner of those shares and, with them, the rights that come with share ownership (such as voting rights and rights to profits). The company itself remains the same legal entity; what changes is who holds the ownership stakes.

This option matches that idea precisely: the seller transfers their shares to a purchaser, who then becomes the new shareholder.

The other scenarios describe different things: selling all of a company’s assets is an asset sale, not a share sale; borrowing funds using shares as collateral is a loan arrangement; and listing on the stock market refers to an initial public offering, not the sale of existing shares.

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