Share Purchase Agreement Due Diligence

The share purchase contract is a contract in which all the conditions are concluded when it comes to selling and buying the shares of the company. This is not the same as in the case of an asset sale contract in which assets are bought and sold instead of shares. The points listed in a stock purchase contract are as follows: The contract usually establishes a minimum liability above which the seller`s liability can be discussed, so that the parties exclude the possibility of minor problems. For each transaction, depending on the size, the amount is the amount in which the parties feel comfortable structuring the agreement. Check copies of shareholders` verified capital statement over the past three years to determine their essential components, such as common shares, preferred shares, own shares, dividends paid in cash or shares. The United Kingdom adopted, on 1st The European Union left the European Union on 1 January 2020 and European Union legislation applies until the end of a transitional period, on 31 December 2020. The UK Government has repeatedly indicated that it would not wish to extend the transition period further. Recent statements by the Prime Minister and other senior cabinet ministers indicate that the UK government may not be able to conclude a trade deal with the EU before the end of the transition period. Prior to the conclusion of the agreement, 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 look at the sales and purchasing section and the guarantees and insurance section.

The period of sale and purchase should have exactly the same conditions as the declaration of intent. If differences are found, this is likely due to the buyer`s due diligence and must be negotiated before the share purchase agreement is concluded. In essence, due diligence is the process in which the target stock buyer reviews the company`s activities, key people, documentation and assets. The process aims to draw the buyer`s attention to the inherent risks that may accompany the purchase of the target shares, but also to justify the value of the investment or purchase price. A third, equally important value of due diligence is to identify any consents needed to transfer the shares (e.g. B banks, lessors or commercial contracts). When purchasing shares, mandatory legal advice is often drawn up by the seller`s lawyers and their delivery to the buyer is a frequent condition precedent for conclusion. Such legal notices should be used by a buyer and ensure security. . . .