For most M&A transactions, the purchase price is usually determined against the latest financial statements of a target company. Purchase price adjustments typically protect a buyer from any change in the value of the target between the date the target was evaluated and the closing of the transaction. In this regard, the buyer and seller must agree on a valuation method and have chosen similar or comparable accounting methods. The contract of sale governs the final sale of an acquired business to a purchaser. The content of the sales contract can vary considerably depending on the legal structure of the transaction (e.g. B a purchase of assets or a purchase of shares) and other factors. The following clauses are usually found in a standard purchase contract: It is important, for a possible claim, that the guarantees provided by the seller to the buyer are not based on subjective factors, that is: the seller`s knowledge, his familiarity with the rules in force or his knowledge of certain circumstances. Examples of expressions used to weaken the strength of warranties are “to the best knowledge of the seller/management of the company” or “the seller is not aware of it”. The acquirer buys the shares of the target and takes the target as it is, both in terms of assets and liabilities. Most contracts that have as their object – such as leases and authorizations – are automatically transferred to the new owner. For all these reasons, it is often easier to make a share purchase than an asset purchase.
As a key element of an SPA, this section of the agreement generally sets out the number of shares to be acquired and determines the rights, securities and shares acquired by the purchaser in the shares. This section should also indicate the purchase price of the shares and how it is to be paid (cash, buyer`s securities, assumption of debts/liabilities, exchange of assets (real estate, personal property, intellectual property, etc.) or a combination of the above, as well as the time and place of the transaction. In this context, it should also be indicated whether the execution of the SPA and the closing take place simultaneously or whether there is a gap between the execution and the closure (a deferred closure). Deferred financial statements are common and may be required for a variety of reasons, including because the parties must obtain different authorizations and administrative authorizations from third parties and, in some cases, the buyer needs time to arrange third-party financing (as may be the case in a private equity scenario). In some cases, whether simultaneously or deferred, the full purchase price is not paid at closing, a portion of which is payable upon the occurrence of certain future events. Given the pace of changes introduced in both Polish and international law, changing court decisions and inconsistencies in the decisions of the tax authorities, appropriate guarantees and indemnification clauses covering the company`s tax comparisons should be among the buyer`s priorities in negotiating the terms of the BSMS. Tax underpayments are real money and can seriously affect the profitability of the buyer`s investment. It is therefore desirable to include appropriate safeguards in share purchase agreements. 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.
. . .