For many involved, the sale or acquisition is likely a one-time or rare event. A glossary of common terms used in sales and acquisitions of private companies is available in the PDF version of this guide. When goods or services are purchased by a consumer, certain conditions are prescribed by law, for example. B that the goods are of satisfactory quality and opportunity. When a buyer acquires the shares or activities of a company, these conditions are not implicit and the general principle « buyer is attentive ». A buyer will want to gather as much information as possible about the company or company in order to understand what it supports – the process is called « due diligence ». As this is a complex area that depends on the specific circumstances of the parties (including the availability of exemptions, facilities and allowances), this Guide does not address the different tax consequences of a transaction. However, the basic rule is that, when it comes to natural persons, sellers probably prefer a sale of shares in order to avoid possible double taxation – an initial tax burden for the company at the time of the sale of assets to the buyer and an additional tax burden for the shareholders of the company when they withdraw the proceeds from the sale of the company. In the case of a business sale, only the assets and liabilities to which the buyer expressly agrees are acquired and everything else remains in between. If the buyer suspects that there are unknown liabilities in the business or is concerned about a particular aspect of the business, they may prefer to structure the agreement as a sale of business, which allows them to « choose » the assets and liabilities of the business and only take on the risks that they understand and deem acceptable.
One asset/liability that the buyer can`t leave so easily is the staff of the goal – see staff and pensions below. In the event of a sale of shares, there is no change of employer and the employees simply remain employed by the target company. Confidentiality Agreement. The buyer is obliged not to disclose confidential information about the company or activity concerned during the negotiation process. This obligation may be reciprocal where information is also provided by the buyer to the sellers or to ensure that the parties themselves treat the proposed transaction confidentially. Sometimes these confidentiality obligations are combined with the exclusivity agreement or are found in the spirit of the terms. It is customary for sellers to include in the sales contract certain safeguards that limit their potential liability under the guarantees (and sometimes certain indemnities). These include: during a share sale, the buyer acquires the company « warn and everything » with all its assets, liabilities and bonds.. .