What are the various legal documents involved in an acquisition?

What are the various legal documents involved in an acquisition?

By Adam Friend | Senior Vice President of Business Development

Legal documentation is a fundamental part of the transaction process.  The main document is the Purchase Agreement, which outlines all of the terms of the acquisition, such as:

  • Deal structure – whether it is an acquisition of the stock or assets of the business

  • Purchase price

  • Earnout terms (if any)

  • Escrow terms – amount and duration until release

  • Assets included or excluded in the sale

  • Liabilities included or excluded in the sale

  • Representations and warranties of the parties

  • Disclosure schedules for key information relied upon by the Buyer

Other legal documents can include:

  • Non-Competition Agreement

    Outlining restrictions on the Seller to start or participate in a competing business post-sale

  • Employment Agreement

    Governing employment of the owner or other key personnel

  • Consulting Agreement

    For transition-related services by the owner

  • Office Lease

    If a facility used by the business is owned by the Seller

  • Transition Services Agreement

    In the event there are shared resources that need to be used for some period of time post-closing (typically in a carve-out transaction from a larger entity)

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