Guide to Selling Your Business
Sale and Purchase Agreement
At the end of the sale process a formal Sale and Purchase Agreement and ancillary Agreements will be entered into. These will have been negotiated on your behalf by your corporate lawyers.
Some points to note about this stage in the process include the following:
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Assuming that the agreement ultimately reached with the purchaser is for the sale of the shares in your company (which is frequently preferable from your point of view) rather than the sale of the underlying assets of the business, the Sale Agreement is likely to be up to 100 pages in length, and it will typically take between six and eight weeks to negotiate this Agreement and all ancillary Agreements.
A major part of the Sale Agreement will be constituted by the warranties and indemnities. The sellers will be asked to accept responsibility for these as a means of enabling the purchaser to claim compensation after the sale should there be any problems concerning the business in areas where the sellers have confirmed that no such problems exist.
When all the Sale Agreement documentation has been agreed on your behalf by your lawyers a completion meeting will be held at which all the documentation is signed up by the parties involved, the sale is agreed to have been completed and the champagne can then be uncorked!
This overview has been prepared as an outline guide only and any action taken should not be based solely on the information given and views expressed here. Appropriate professional advice should always be taken in specific instances.