If a company goes through an acquisition (share sale), do we need to issue new employment contracts to the employees after the completion of the sale or can they remain under their old contracts?
Generally, a share sale acquisition that does not involve a sale of assets will not require new employment contracts for existing employees. Where, for example, Company A acquires the shares of the former corporate owner of Company B, there is no change to the identity of the employing entity and new contractual arrangements are not required. There may, however, be circumstances where the acquiring company decides it is appropriate to create new employment contracts in this situation. For example, the acquiring company may wish to align the terms of employment for those working for Company B with other companies that Company A may also own. This must be done by agreement with the affected employees.