5. Guarantees and compensations – The buyer will provide in the agreement important guarantees of the seller on the assets and commitments of the company. The buyer acquires the company with all its history and potential debts. The buyer will attempt to identify potential problems through due diligence prior to the conclusion, but there may be things that are not identified, such as a breach of a major contract of the target company, either by the company itself or by the other party, or a termination of the employee that occurred but has not yet resulted in an effective claim for compensation. As a general rule, the buyer wants the seller to be responsible for any claims related to activities in the store that occur before the conclusion, whether or not the seller is aware of the potential of a claim. On the other hand, the seller will try to limit his potential liability to the questions that will give him away. This is usually a very negotiated point. When buying all the shares of a company (100% of the shares), it is recommended to use the purchase of commercial agreements instead. A share purchase agreement should be used whenever a person or company sells or buys shares in a company or another person or company. The class of common or pre-weighted shares may affect the shareholder`s share of the company`s profits or the amount it receives when the company is liquidated and whether a shareholder has voting or non-voting shares, decides whether or not the shareholder has the right to vote at shareholder meetings. Shares (or shares) are shares of a company divided among shareholders (also known as shareholders).
Companies that offer several types of shares sometimes also have a series (Class A, Class B, Class C, etc.) that may be worth different amounts of money. For example, 100 Class A common shares may not be of the same value as 100 Class B. 1 shares. Tax considerations – it`s always a critical issue. The seller wants to minimize the taxes payable on the proceeds of the sale and the buyer is generally willing to respond to this wish, provided that he is not too disadvantaged by the steps taken by the seller. With respect to the sale of a Canadian controlled private company, each seller can have access to an exemption of $US 813,600 for capital gains (in 2015 with indexed increases in the coming years) on the proceeds of the sale, and then on the tax treatment of capital gains on the balance of earnings above that amount. For many businesses, this results in significant tax savings for the seller, as opposed to the sale of the company`s assets. In some cases, where the purchaser could obtain a significant tax benefit from the acquisition of assets in place of shares, z.B. if the entity has depreciated assets that could be « registered » significantly for future amortization to be withdrawn from the purchaser, the structuring of the transaction as an asset or share purchase transaction may be an important trading point; However, since the seller controls whether he is willing to pursue a sale transaction and there are various other advantages for a share transaction, it is more common for the structure of the share transaction to be used. 2. Excluded commitments and assets – The purchaser assumes all the debts of the company acquired in connection with a share purchase transaction, with the exception of certain debts which are described in the agreement as excluded and withheld by the seller.