Share Purchase Agreement German

So-called “interrogation” is generally used when small businesses with active shareholders participate in management or when certain shareholder executives are encouraged to continue working for the company after the closure. Another merit may be a valid addition to a business purchase agreement if the parties fail to agree on a purchase price. In such a case, a salary offers a fairly simple solution for an adjustment of the purchase price (in a loyalty amount to be paid in the future). In this case, certain thresholds are set between the parties. If the acquired S.A.R.L. achieves such performance thresholds in a certain period after closing (z.B. over the next 2 years), an additional amount is added to the purchase price payable to the seller. Very often, earnings-related indicators, such as EBIT or EBITDA, are agreed as target values. If the results identification figure is completed on the agreed date, the purchase price is increased by the agreed amount. This model assumes that 100% of the shares of a target company are transferred from a seller (intragroup) to a buyer (intragroup) in the form of a limited company. In addition, the agreement assumes that the transaction will be concluded immediately after the signing of the agreement.

The financial statements consist of the payment of the purchase price by the buyer and the delivery by the seller of the usual acquisition documents (e.g.B. share certificates or declarations of sale, decision of the board of directors of the target company to obtain the buyer`s approval as a new shareholder, updated share register, etc.). Only the seller has a detailed knowledge of the target entity and all the essential information about the operational situation, existing and potential risks and the internal life of the company. The basic rule is that the buyer is rather misinformed about existing risks, potential risks or residual risks associated with the acquisition and operation of the target business. It has become common for the buyer to review and evaluate the LLC to be resumed, using specialized lawyers and consultants to conduct a legal, tax, economic, financial and, if technical, due diligence review to analyze all relevant aspects of the target company in order to identify the risks associated with the transaction (so-called due diligence procedure).

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