3 Legal Documents Required For Acquiring a Business

Acquiring an existing business not only opens the door to new opportunities, but it also offers a whole lot of benefits. For example, it gives the buyer access to an existing customer base, the buyer does not have to train employees, and they also get the acquired business’s intellectual property. In a nutshell, one does not have to start from scratch.

To ensure everything goes smoothly and legalities are followed, many businesses hire M&A Law Firm in Beirut, Lebanon or other parts of the world. M&As are under the local government’s scanner. To ensure no laws are violated, you may be asked to furnish legal documents that validate the deal. In this post, we take a look at some important documents that you’d require when acquiring a business, irrespective of your location.

1. Heads of Agreement 

Heads of Agreement includes a summary of the major terms and conditions of the deal. Alternatively known as Heads of Terms, the document is considered as an outline of the framework of the deal. The document, however, must include important details related to price, intellectual property, warranties, and indemnity.

2. Asset Purchase Agreement

Asset Purchase Agreement must include details about the assets such as stock, machinery, and intellectual property purchased. If the business’s office is located on leased land, the landlord must provide their consent in writing to transfer the lease to the new owner. The document must also cover details related to warranties, employee transfer, and the business’s creditors and debtors.

3. Share Purchase Agreement

Companies that prefer structuring the deal as a purchase of company shares, will need to draft a Share Purchase Agreement. The agreement must cover details pertaining to indemnities, restrictive covenants, and clauses limiting the acquired company’s liability. The Share Purchase Agreement must also include the disclosure letter that records any exception to warranties.

Do your homework before acquiring a company

These are some legal documents that you’d need when buying a business. Before closing the deal, direct your legal team to draft completion documents covering completion agenda and board minutes, in case of share transfer. M&A laws are complex, which is why It is advisable that you consult an M&A law firm in Beirut, Lebanon or any other part of the world.