The simultaneous signing and execution of a deal (in which the parties sign the SPA and close the sale on the same day) is the easiest and easiest way to close a deal. However, a lag between signature and completion is sometimes necessary to meet certain final conditions that are still outstanding. These are known as „conditions of precedent“ and generally include the authorizations of the tax authorities, the authorization of merger by the public authorities and the agreement of third parties (. B, for example, if a change in the control provision is sold in an essential contract of the company). 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, the drag-along right may be helpful. It allows majority shareholders to force the minority shareholder to sell – or „pull“ its shares. However, this sale must be made under the same (financial) conditions as those offered to the majority shareholder.
The buyer will try to prevent the seller from creating a new competitive business that will damage the value of the business sold. The sales contract therefore contains restrictive agreements that prevent the seller (for a fixed period and in certain geographic regions) from recruiting existing customers, suppliers or employees and, more generally, from competing with the sale of the business. These restrictive alliances must be adequate in geography, size and duration. Otherwise, they may be in violation of competition law. This analysis is an important step before the development of the share purchase agreement. While the current actions could result in hefty fines for the buyer, a change in control clauses in supplier and customer contracts could threaten the company`s top line. A sales contract (SPA) is a binding legal agreement between two parties that binds a transaction between a buyer and a seller. SPAs are generally used for real estate transactions, but they are present in all industries.
The agreement concludes the terms of sale and is the culmination of negotiations between buyer and seller. Restrictive agreements prevent the seller from competing with the buyer for a limited period after the sale has been completed. They may include: After the conclusion of the sale and sale contract, the sales contract remains an important reference document, since it covers the operation of a possible contract and contains restrictive agreements, confidential obligations, guarantees and allowances, all of which can remain very relevant.