When someone sells their shares in a business, they often hope for a clean break. However, as some of the company`s liabilities – particularly the tax – are not disclosed until after the transaction, buyers must ensure that outgoing owners remain on the hook, and this is one of the main objectives of the main sales document, the share purchase contract. At the beginning of the GSO, the identity of the seller and buyer, including their addresses and your statutory headquarters, is described if it is a company or other legal body. If the business is owned by more than one shareholder, it is important for the buyer to ensure that each seller is responsible for the total amount of debt (joint and several liability) or, if not, as the distribution of liability is distributed among the individual sellers. 3. Reverse triangular mergers – the buyer`s subsidiary merges for the purpose (the target survives and the buyer`s subsidiary ceases to exist). Companies that offer several types of shares sometimes also have a series (Class A, Class B, Class C, etc.) that may be worth different amounts of money. For example, 100 Class A common shares may not be of the same value as 100 Class B shares. All agreements with HMRC. Details of unpaid taxes (including corporation tax, VAT, LTDS and/or PAYE), deferred tax provisions, all tax compensation and tax allowances made, the last six calculations and tax returns for the company and each correspondence with HMRC, the data whose returns have been paid and confirmation of any tax losses (if they exist). Representations, guarantees and commitments made in a G.S.O. should survive the execution and delivery of the OSG and the closing of the transaction, beyond the closing of the transaction.
Some misrepresentations and breaches of the warranty may not be visible until after completion. The survival of representations, guarantees and pacts (as well as compensation terms) beyond the conclusion of the transaction protects the buyer if he receives less than he negotiated. However, the parties should carefully consider the existing legislation of the OSG to determine how the jurisdiction assesses and imposes statutes of limitations. Some jurisdictions prohibit exceeding contractual rights beyond the jurisdiction`s statute of limitations, even if the parties to a CSE explicitly agree on a language of survival that allows a right to the infringement to go beyond the jurisdiction`s statute of limitations. Various provisions are an integral part of a well-developed agreement. Many embellish these terms and consider them a standard boiler platform when they are actually important. It is a place where lawyers can store terms that could be overlooked. The share purchase agreement is an agreement in which all conditions are concluded when it comes to selling and buying the company`s shares. This is not the same as an Asset Purchase contract in which assets are bought and sold in place of shares.