Finalising the sale & transferring ownership
All answers are for general guidance only. Each case must be handled on individual facts.
Q: What’s involved in finalising the sale agreement - what are the Heads of Agreement, Disclosure Letter and Warranties I will be asked to sign up to when I finalise the sale and transfer ownership of the company?
To do it properly there is a lot of work involved in finalising the sale agreement and completing the transfer of ownership of the company. A good adviser will take as much of the burden as possible and guide the seller to a successful conclusion, but sellers themselves should not underestimate the time and effort that will be required of them.
Heads of Agreement
The Heads of Agreement is an agreement in principle between the seller and the buyer recording the fundamental points of the agreement reached between the parties. It is usually, and ought to be, non-binding except for certain provisions regarding confidentiality, non-solicitation and exclusivity (lock-out). The document forms the foundation from which the advisers draw up, negotiate and finalise the detailed documentation.
Warranties
The buyer will seek assurances that the business information supplied by the seller during the due diligence process is true and accurate and will try to flush out any information known to the seller which the buyer may consider pertinent to carrying on the business of the company. The buyer does this by requiring warranties from the seller - numerous statements of fact included with the Sale Agreement. If the seller gives a warranty which is found to be inaccurate or false, the buyer can look to sue for breach. Consequently, the seller should work closely with their professional advisers to seek to reduce any potential liabilities under the warranties.
Disclosure Letter
Warranties are made "subject to disclosures". A formal disclosure letter is prepared that lists various documents disclosed before the agreement is signed and refers to instances where the warranties need to be qualified. Generally, there is no claim in respect of any matter fairly disclosed in the disclosure letter.
The sale and purchase process can be time consuming and emotionally draining. It is important for you to understand all the various aspects of the transaction and to trust your advisers. Experienced advisers know of proposed transactions that have failed at every stage up to, and even at, the completion meeting itself.
Your questions answered:
Recent Experts
About Stephen
View My ProfileServices
Dealmakers Services Directory
Find an advisor to help you buy, sell or invest
Property Services Directory
Find an advisor across property services
Commercial Property Finder
Full commercial property listings in the North West
Venue Finder
The online resource for business event organisers in the North West
Guides
North West City View
The news, features and analysis that matter for your city
International Trade
Our guide provides expert analysis on a range of trade destinations
42 under 42 Members
The latest class of the North West's brightest young business people
Back the Bid
Help Insider's campaign to improve the trans-Pennine rail network
- Contact us
- Midlands
- North West
- South West
- Wales
- Yorkshire
- Other regions
- 0121 232 0980
- 0161 907 9711
- 0117 906 5900
- 02920 434500
- 0113 220 4410
- 0161 907 9718
- Insider regions
- Central & East
- Ireland
- Midlands
- North East
- North West
- South East
- South West
- Wales
- Yorkshire