Related Expertise
- Account collection
- Addition or departure of shareholders
- Bankruptcy and Restructuring
- Buy-Sell Agreement
- Change in the legal form of a company
- Commercial litigation (shareholders, employees or others)
- Company Book
- Consignment Contract
- Contract of partnership
- Convertible debenture
- Corporate reorganization and restructuring
- Corporate resolutions
- Creation of a subsidiary
- Director’s liability
- Drafting of articles of constitution
- Franchising
- Governance and Internal Management
- Implementation of a Tax Memo
- Intellectual Property
- Joint Venture Agreement
- Legal Publicity of Enterprises
- Management Company
- Planning and Tax Litigation
- Preparation and review of commercial leases
- Securities and access to public markets
- Share subscription agreement
- Shareholders Agreement
- Starting a business
- Strategic Partnership
- Taxation and tax litigation
- Term Sheet
- The Letter of Intent of the Offer to Purchase
- Trusts (estate and asset protection)
- Unfair competition, Duty of loyalty
The buy-sell agreement sets out the terms and conditions of a sale of assets or of shares. Thus, the drafting of an adequate buy-sell agreement makes it possible to foresee, anticipate and avoid many situations that could have led to commercial litigation.
One of the crucial elements of the buy-sell agreement is the determination of the object of the sale and the consideration. On the one hand, the buyer must make sure to clearly define the assets or the shares he wishes to acquire. On the other hand, the seller must be sure to define the consideration he wishes to obtain, for example, a sum of money or the assumption of liabilities by the buyer. In the case of a cash consideration, the terms of payment such as the date, frequency, amount of payments and, if applicable, the interest rate should also be included in the buy-sell agreement. The seller may also require that the buyer agrees to certain guarantees and that other persons intervene as sureties.
In some cases, the parties will also benefit from providing clauses allowing the adjustment in the sale price. For example, in the sale of shares in a company, the parties ma have an interest in adjusting the price of sale based on the current liabilities and assets of that company or based on tax provisions. Either way, it is a good idea to do a due diligence before entering into a buy-sell agreement.
In addition, the buy-sell agreement should ideally contain the declarations of the buyer and the seller. The buyer can confirm that he meets the conditions requested by the seller such as financing from a banking situation. The content of the declarations differs depending on the purpose of the sale and requirements of the parties. For example, the buyer could ask the seller to declare that the company’s permits and licenses are valid on the date of the transaction, that the financial statement fairly reflect the company’s situation, that the seller is the true owner of the goods that he sells or that the good are free of all rights and are not involved in a dispute.
Finally, the buy-sell agreement may contain a multitude of other provisions adapted to the concrete situation of the parties: non-competition, non-solicitation, evaluation and non-disclosure clauses are examples of clauses found in many agreements.
In short, negotiating, drafting and concluding a buy-sell agreement are crucial steps in any sale of assets or shares. Bernier Fournier’s team is there to advise you in this process, which is as important as it is complex.