Company sale agreement: with property; no retention
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- Guidance notes included
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About this document
This document is suitable for any individual or company selling or buying a company or a proportion of the shares in a company. It is usual for the buyer to produce the sale document but there is no reason why the seller should not obtain an advantage by making the document his and thereby obtaining the advantage of preliminary editing in his favour.
It is therefore a suitable also for a seller of a company 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.
Use the table to select which of our documents bests suits you. Note that the type of business is generally of low importance. You can use one of these templates to buy a trout hatchery or an architect’s practice.
A word about warranties:
Warranties protect the interest of the buyer, who does not have the information available to the seller. It is fair and reasonable for a buyer to demand warranties and for a seller to give them. However, it is quite easy for a buyer to use warranties to “improve” his original deal. So, if you are a seller . . . . 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.
150 warranties sounds an awful lot. Do you really need them? Will you understand them. Net Lawman advises: absolutely yes and absolutely yes! Our warranties are written in plain English. 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.
This document unsuitable?
Application and features
- Suitable for any type of trade or business;
- Extensive use of warranties encourages full disclosure by the seller;
- Drawn for the deal to be completed on the same day, not at some future time;
- Suitable for a group of companies or a single company of any size;
- Suitable provisions for contract to cover leasehold, freehold and tenanted property;
- Limited warranties (unlike the others in this set);
- Retention from purchase price against warranty claims;
- Retention up to three years against reduction in forecast profit;
- Additional payment for “earn out” - profit in excess of target;
- Provision for some Sellers to be trustees and not therefore bound by the Warranties.
- Agreement for sale;
- Purchase price and how made up;
- New shares to be issued by buyer;
- The retention against warranty or other claims;
- Additional price to be paid for performance over target;
- 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;
- Details of (group) company;
- The warranties;
- Particulars of the properties;
- Pension arrangements;
- Sums for calculation of additional price;
- And up to 150 individual warranties are in sections relating to: the effect of this agreement, group structure and operation, accounts, cash flow, taxation, banks 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.
This document was written by a solicitor for Net Lawman. It complies with current Australian law.
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