The interpretation is covered by the share purchase agreement, which contains definitions of all the terms used in the agreement. The sale and purchase of shares are also listed, covering purchase price adjustments, purchase price and dispute resolution. The guarantees and assurances of the buyer and the seller give all the statements that the buyer and the seller sign and claim to be true. Everything related to employees is also covered, including the terms of their benefits and how the accumulated bonuses are managed. After the conclusion (singing of the agreement), there are a few steps that the buyer must take: these measures can be decisive for the future of the company. If you need instructions from a reliable team during the process, please contact us. The contract consists of five main parts: (1) Description of the transaction; (2) the terms of the contract; (3) warranties and guarantees; (4) limitations of liability; (5) Terms. Before the agreement is reached, a memorandum of understanding will be established to explain the planned sale. A buyer must have due diligence and ensure that the sales contract and the MEMORANDUM of understanding have the same conditions.
The seller should specifically consider the sale and purchase industry as well as the area of warranties and representations. The sale and purchase sector should have exactly the same conditions as the Memorandum of Understanding. Some buyers may only be interested in acquiring exclusive ownership of a business. If the target is made up of several shareholders, some may not want to sell their shares. In this case, moving to the right might be useful. It allows majority shareholders to force the minority shareholder – or “pull” – to also sell their shares. However, this sale must be made under the same (financial) conditions as those proposed to the majority shareholder. Since the buyer inherits a business, buying shares usually carries a much higher risk than buying assets.
This justifies the inclusion of guarantees necessary for the protection of the buyer. Most of the problems found during due diligence can be mitigated or compensated through the share purchase agreement. However, they must be disclosed in due diligence, identified by the buyer and treated appropriately in the SPA. Legal Due Diligence is part of the due diligence period before the submission of the mandatory offer. It involves a comprehensive review of a company`s external and internal legal relationships. All essential contacts, such as supplier and customer agreements, employment contracts as well as ongoing disputes and litigation, will be subject to a detailed analysis. The right of pre-emption describes the obligation for a shareholder to offer his share to one of the existing shareholders before being sold to a third party. This allows the existing shareholder to buy on the same (financial) terms as those offered by the external buyer. Once the shares of the target transaction have been transferred, ownership is transferred to the buyer. It is likely that the buyer wants to appoint new directors, accountants, etc. The buyer may also want to remove the current officials.
When a company is composed of several shareholders, there is usually a shareholders` agreement. These agreements define the rights and obligations of shareholders. In most cases, they contain certain rights related to the exit of a shareholder. If this is the case, lawyers must take these rights into account in the share purchase agreement of the transaction. A share purchase agreement contains information about the company for which the shares are transferred, the seller and the buyer of shares, which covers the agreement, the type of shares sold and the number of shares sold and at what price. This agreement also contains payment details, including when a deposit is required, when full payment is due, and the closing date of the agreement On that day, it is customary for the parties, buyers and sellers, to appear before a notary to confirm their consent and continue the payment of the sale price and delivery of the shares taking into account the ownership of the fully transferred shares (the “final phase”).