Sale and Purchase of Shares

Sale and purchase of shares lawyers

Leigh Adams Business Lawyers handles business sales, purchases and mergers. Many such transactions occur by the selling and purchase of the underlying shares in the company running the business or the underlying units in the unit trust which runs the business.

We can assist you to prepare for, negotiate, manage and complete the transaction. As Leigh is an accredited specialist in business law, we have the skill set and breadth of experience to advise on all aspects of your business transaction.

We can help you by advising you of the issues involved. More specifically, we can assist with the preparation of Heads Of Agreement to lock in binding key terms which allows for the agreement to be documented subsequently. We can advise you on the appropriate business structure for your purchase and the appropriate asset protection measures available to you.

Due diligence is always an issue. As a vendor, you should take time to ensure that the business is properly organised. Purchasers look for holes and if they find any, you can be sure that the price offered will fall or be withdrawn altogether. A purchaser on the other hand should not feel compelled to buy without undertaking proper due diligence. If the business has key contracts with customers or suppliers, then we can review them and ensure that they are enforceable.

A key differentiator between the due diligence required when dealing with the sale of shares of a company or units of a unit trust on the one hand, and the sale of a business in its own right on the other, is the issue of unanticipated debts or liabilities (including tax) of the company or trust. When you buy a business, you generally leave the liabilities and tax problems (if any) of the vendor with the vendor. But when you buy the shares of the company or the units of the unit trust, these liabilities come with you. We can assist by making appropriate enquiries as to the status of such matters and inserting appropriate warranties and indemnities into the contract.

The extent of due diligence varies for each transaction but typically also includes a close look at the corporate governing documents like shareholder agreements and trust deeds. Do the employment agreements comply with legislation and are enforceable restraints in place? Where applicable, the mechanism for undertaking a stock-take and valuing plant and equipment will need to be outlined in the contract. For on-line businesses, additional issues arise like whether the website terms and conditions are up-to-date.

We can also review any unresolved litigation and work with your accountant to assist in giving clarity to the real meaning of the business’ financial statements. For example, we can determine what security interests exist and what security interests should exist. This is very important, now that new legislation mandates that possession is more important than ownership in relation to such matters.

If you have any questions or just want to discuss a possible sale or purchase, then give Leigh a call on 02 9570 7844.