A comprehensive company sale agreement for sale of single
company: no real property; cash deal no shares, no
retention; no additional sum; full warranties
About this document
This document enables a sale or purchase of a minority or majority stake in a company. It is suitable for high value transactions and any type of enterprise. Note that the type of business is generally of little importance, for example you can use this template to buy into a coffee plantation or an accountancy firm.
Agreements for sale of a business, where you are selling or buying not shares in a company but just the business as a going concern.
A word about warranties
Warranties protect the interest of the buyer, ensuring that what the seller says is not marketing fluff, but the absolute truth as he believes it.
It is common practise and very reasonable for a buyer to demand warranties and for a seller to provide them. It is also quite easy for a buyer to use warranties to “improve” his original deal, so they can be a good negotiation tool.
Sellers: do not give a warranty if you do not know whether it is true, but do be prepared to “go and find out” information that could be within your knowledge. Simply, use them to your advantage and negotiate on which to include.
You are probably asking yourself “Do I need 140 warranties?” “Will I understand them?” We say absolutely yes and absolutely yes! Our warranties are written in plain English with no legalese or other jargon – they are simple and effective. A seller should start with a full set unless he is sure he knows everything there is to know about his proposed acquisition, or the value is very small, or the company is not trading.
Net Lawman document templates offer around 150 “full” warranties, or a reduced set of around 115. Either way, around 30 cover real property, so if your company has none, the number comes down.
Why you need such a long document
Net Lawman has set out to protect the buyer or seller, not to make decisions about what you do or do not need in your contract. Every situation is unique. Simply choose what you need in your agreement and delete what does not apply.
This document assumes a buyer is buying perhaps 20% to 60% of the shares. He may also be arranging a loan facility or otherwise supporting the company (these other arrangements are not covered in this document, but Net Lawman can supply a loan document, shareholders’ agreement and directors’ service contracts). It is assumed that the Buyer wants the same level of protection as he would expect if he was buying the whole company. In this agreement, the warranties are given not only by the sellers of shares but also by those “staying in”.
Who will use these documents?
• Any individual or company selling or buying a stake in a company. It is most common for the buyer to produce the sale document. However, producing the document yourself, whichever side you are on, gives you the advantage of being able to amend it in your favour
• This agreement allows a buyer to decide how tough he wants to be and who he wants to bind. As drawn, the document binds all the shareholders, not just those selling, but politics may require warranties to be given only by those departing
• A seller of shares wanting tips and hints as to what is fair and reasonable in a document comparable to the one now presented to him by the buyer or his solicitors
Application
and features
Appropriate for any type of trade or business
Extensive use of warranties encourages full disclosure by the sellers and the ongoing shareholders
Drawn for the deal to be completed on the same day, not at some future time
Suits a single company of any size
Suitable provisions for contract to cover leasehold, freehold and tenanted property
Up to 150 individual warranties where required
Retention up to one year against reduction in forecast profit and warranty claims
Provision for some sellers to be trustees and not therefore bound by the warranties This document includes paragraphs for:
Agreement for sale
Purchase price and how made up
New shares to be issued to buyer
Calculation of minimum profit
Completion of the deal and delivery of documents
Warranties applicability
The Warranties
Trustees limited Warranties
Restrictive agreement to prevent Sellers from competing afresh
Sellers protection provisions
Various legal provisions usual in a document of this type
Existing shareholdings
Details of the company
The warranties
Particulars of the properties
Superannuation arrangements
Contents
General
Effect of this agreement
Group structure and operation
Accounts
Cash flow
Taxation
Bank and borrowing
Assets
Trading and contracts
Business matters
Litigation and regulation
Properties - freehold, leasehold and let
Employment
Pensions
Insurance
Intellectual property
Internet and domain names
Word
Count (approximate):
Document: 7555
words
Explanatory notes:
2535
words
Draftsman
This document is drawn and maintained by Net Lawman. It is real law in plain English.
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