“Any officer or director of the Corporation is authorized and responsible for doing all acts and things and executing or executing all instruments, agreements and documents that he believes may be necessary or desirable to carry out the transactions in this document.” A company`s statutes are those that can sign agreements on behalf of a company and if those people – usually directors and/or officers – can appoint another person to approve an agreement. The sales and sales contract may also limit the seller`s liability by setting the maximum amount to be paid by a seller in case of violation of the insurance, guarantees and commitments received. The limit may be equal to the purchase price or a percentage of the purchase price. Or there are restrictions on compensation specific to certain types of losses, i.e. violations of general representations and guarantees will result in payment of up to a maximum of 30% of the purchase price, while violations of environmental representations and guarantees result in a refund of up to 50% of the purchase price. In the case of basic infringements such as ownership of shares or assets, the limit is often not less than the purchase price. Regardless of the acquisition of assets or shares of a company (see our article: Asset Sale vs. Share Sale), the first step is to negotiate and design the GSP. The GSP is sometimes prepared by real estate agents, brokers or even the parties themselves. However, it is customary and recommended that lawyers be retained to prepare or at least verify the GSP before the parties sign.
At this point, the buyer and seller will likely have had preliminary discussions on the main terms (for example. B purchase price, asset or sale of shares), or even have written a non-binding letter of intent setting out all essential conditions. The lawyers are then tasked with negotiating and repairing the details of the GSP. The parties must also agree on a deadline, which is the date on which the transfer of ownership is officially carried out. The deadline for submission is often 30 to 60 days after the signing of the GSP, but this depends on the circumstances of the parties. Employees are usually another point of contention when negotiating an asset purchase. When a company`s assets are sold to a new buyer, all employees become, in accordance with the law, the buyer`s successors. This means that all staff liability, such as work history, leave pay, severance pay and severance pay, will be transferred to the purchaser. If the buyer wishes to terminate an employee purchasing after 6 months, the buyer must pay the employee`s termination salary for the entire duration of the employee in the previous company. In the absence of provisions to protect the buyer, the buyer may have to pay a large bill as a redundancy payment to a worker. As a result, a buyer generally requires the seller to terminate the employment of all employees with the company effective on the reference date. The buyer requires the seller to pay the employees all legal rights to the termination, such as termination fees, severance pay and accumulated leave pay.
The purchaser will then offer employees employment under the same conditions as the previous job. Employees begin working with the buyer`s deadline and the buyer will not be responsible for staff until that day for leave, termination and redundancy pay.