A well-crafted purchase and sale agreement is one of the most valuable tools a business can have to protect its value in the event of death, obstruction or divorce that affects one or more of the owners, and can also provide important business savings methods to manage both the voluntary sale of shares and the bankruptcy of a shareholder. In the absence of such an agreement, any of the events described above can even destroy a healthy business or force owners to cooperate with strangers without expertise in their business. Such an agreement not only protects the company, but the family of a deceased shareholder is fairly compensated for the property rights of his loved one, without depriving the company of the reserves it needs. Do you want to buy or sell a business, but don`t you really know where to start? Our business lawyers are experienced in advising when selling and buying businesses and help you do so with minimal stress. Conciliation with a lawyer`s fees clause is regularly included in the agreement, which completely avoids costly legal proceedings. See our article on the acidity clause. None of this need has happened. The above-mentioned owners could have avoided the entire dispute fairly and at a lower cost if they had first drawn up a contract of purchase and sale and if, in all likelihood, the first business was still operating today and the wife had been able to sell her shares in the second example at a fair price. Understanding contracts when buying or selling a business There are several steps to buying or selling a business.
The buyer must then start verifying the transaction – this is called preliminary due diligence. Due diligence should only be initiated when lawyers have been appointed and a binding offer to purchase has been agreed and signed. The first contracts you sign will be with a financial advisor for financial and tax advice, a lawyer for information about your legal possibilities and for the seller with a business transfer agent or business broker to address potential buyers. They must clearly define tasks and pricing structures. For more information, see our guide to selecting and collaborating with a lawyer and selecting and collaborating with an accountant. The purchase and sale agreement is also called a purchase-sale agreement, a buy-back agreement, a business contract agreement or a professional agreement….