When a company sells its customer lists and trade name, it is essential that the agreement control a transaction. Because the entire purchase price is based on the goodwill of the seller. There are no hard or physical assets like products, equipment or inventory that make the value of the business. A company`s goodwill is usually closely tied to the seller who generated that goodwill in the market. If he or she continues to carry out a similar activity, the value of the good business purchased will be reduced to zero, thus effectively destroying your purchase. The agreement serves as a contract between a buyer and a seller that sets the terms of sale of a company`s assets. This contract is necessary to protect each party from any liability and dictate the conditions of sale. After all conditions have been met or cancelled, the transaction is now considered firm. This means that the parties work to the conclusion and that the lawyers prepare and negotiate all the final documents necessary for the legal execution of the transfer of the business. The main advantage of an asset purchase is that a buyer can choose the assets and liabilities they want to acquire.
The risk of hidden liabilities is usually lower than that of a share purchase. Buying and selling a business is a complex transaction in which a lawyer assists throughout the process with advice and guidance. These include the negotiation and organisation of the underlying sales contract, assistance in the execution of the conditions, as well as the preparation and negotiation of the final documents. You can ask a lawyer at any time for advice on the transfer of employees and TUPE as part of a property purchase. The company`s articles of association contain clear instructions on how directors will make decisions for the approval of agreements. A decision of the Management Board establishes that the final determination clause contained in a decision of the Management Board authorising an agreement is the watchword. This gives the authorized signing authority the right to execute any other subsidiary documents that may be necessary for the completion of the transaction provided for in the agreement. A survival period limits the period during which a buyer can initiate a dispute for breach of insurance, guarantees or obligations. The usual survival periods are 12 to 36 months for general insurance and guarantees, six months after the expiry of the limitation period for tax matters and six months after the expiry of the applicable limitation period for fundamental guarantees and guarantees, such as.B.