One of the obligations of the directors of a company is to approve agreements, contracts, leases and other documents that the company goes or has entered into with other parties. A description of the receivables that are included in the sale (or excluded from the sale), along with a description of how recoveries are applied and how unselected receivables are treated. A definition of disputes and dispute resolution rules relating to the management of defaults should not be given to the buyer or seller under the terms of the contract. Next week of “Selling Your Small Business”, we will move to the top of the financial and tax impact of a sale. The buyer usually has a conditional period of five to twenty days after the execution of the GSP to carry out due diligence and ensure financing. the details of the non-competition or non-competition clause, management consulting contract or employment contract that the seller will sign as part of the closing transaction. The Purchase and Sale Agreement (“GSP”) is a binding contract between the buyer and seller that obliges the buyer to buy and the seller to sell assets or shares of a company subject to the conditions set out in the GSP. The GSP contains conditions such as the purchase price, insurance and guarantees, conditions and closing date. The company`s articles of association contain clear instructions on how directors will make decisions for the approval of agreements. A decision of the board of directors states that if you buy shares of a company, you are buying part of all aspects of the transaction. If you buy all the shares in the business, you own all facets of the business. A company`s articles of association determine who can sign agreements on behalf of a company and whether these people – usually directors and/or senior officers – can appoint another person to approve an agreement. If the due diligence investigation, which follows a buyer`s purchase proposal, succeeds, it is time to start the last – and very important – negotiations prior to the conclusion of the sale.
The graph above leaves little doubt about the detailed and complete nature of the sales contract. It is also the basis for negotiations between you and your buyer, not only on the price, but also on what is contained in the purchase (and who is excluded from it) and how the agreed payment is paid and distributed among the investment categories defined by the IRS. details of how the price is adjusted at the balance date to reflect proportionate business expenses and, where inventory and receivables from supplies and services are sold, to reflect closing day valuations. Make legal returns and filings with the CRA to have your income tax return reflect your new status and that of your business. Below are some of the steps you should take when you have purchased a new business. list of all assets included in the sale, including furniture, furniture, equipment, machinery, inventory, receivables, business relationships, business name, customer lists, business or company property and other items; also includes assets to be excluded from the sale, such as cash and cash accounts, real estate, cars, etc. .