Legal Support for Business Sale and Purchase Agreements
In the constantly evolving modern business environment, business sale and purchase agreements have become an essential component of strategic management and company development. The transfer of ownership, whether it’s acquiring or selling a business, often defines a new era for the enterprise, its growth, or, conversely, a strategic reboot. In this context, well-planned and legally grounded agreements take on a decisive significance.
Legal support for business sale and purchase agreements is a key factor in the success and stability of this complex process. This critical phase of business operations requires not only strategic thinking and financial expertise but also a deep understanding of legal nuances that ensure legal clarity and security for all parties involved. In this context, it’s important to scrutinize every detail of the agreement from the perspective of the country’s legislation in which the transaction will take place, conduct Due Diligence to establish a stable and long-term partnership between the parties. This is particularly relevant now as Ukrainian businesses seek to diversify war-related risks by buying or selling businesses in Ukraine and abroad.
What Issues Does Legal Support for Business Sale and Purchase Agreements Address?
Legal support for business sale and purchase agreements addresses a range of important issues aimed at ensuring legal clarity and success for all parties through the Due Diligence process, including:
- Determining the legal status of the company, checking its registration, and identifying possible legal issues.
- Verifying the legal cleanliness of assets, including ownership, absence of encumbrances, and other legal issues.
- Assessing the financial condition of the company, identifying potential financial risks, and ensuring objective financial information.
- Determining current and potential tax obligations of the company, as well as evaluating the tax strategy.
- Reviewing existing agreements and contracts, identifying legal obligations and risks.
- Examining the workforce, risks associated with employee transitions, and determining the legal status of employees.
- Checking the presence and validity of all necessary licenses and permits.
- Studying and analyzing the company’s obligations to regulators and their compliance.
- Identifying potential risks and developing strategies to prevent or mitigate them.
- Determining possible financing methods and agreeing on the financial terms of the agreement.
Business sale and purchase agreement support helps minimize risks for all parties, ensures transparency of the agreement, and makes the process as efficient and successful as possible.
Business Sale and Purchase Agreement Support in Ukraine and Abroad (M&A Transactions)
Support for business sale and purchase agreements in Ukraine and abroad requires a specific approach and consideration of various legal, financial, and cultural aspects. Let’s consider the main differences and key aspects to take into account in each case:
Business Sale and Purchase in Ukraine:
- Familiarizing oneself with the Ukrainian legal environment, including corporate law, tax legislation, and other regulations that may affect the transaction.
- Interacting with local regulators and authorities, such as the Ukrainian Antimonopoly Committee, tax authorities, and others, to ensure compliance with all requirements.
- Assessing the tax consequences of the transaction and selecting optimal tax strategies.
- Examining aspects of labor law, including employee rights transitions and other personnel-related issues.
- Reviewing existing contracts and agreements, identifying legal obligations and risks.
Business Sale and Purchase Abroad:
- Gathering and analyzing information on international law and relevant norms in the country where the transaction takes place.
- Accounting for currency risks and financial requirements in the context of international transactions.
- Assessing the tax consequences of international transactions and considering international tax conventions.
- Understanding cultural aspects and nuances of the local business environment that may impact the transaction.
- Accounting for international sanctions and restrictions that may affect the conclusion of the agreement.
What Does the Procedure for Legal Support of Business Sale and Purchase Look Like?
The procedure for legal support of business sale and purchase includes several stages:
- Pre-sale comprehensive legal audit – Due Diligence.
- Development of a business acquisition scheme.
- Conclusion of an agreement on the transfer of rights to assets (implementation of the business acquisition scheme).
What Constitutes the Cost of Support?
The main elements that can affect the cost of legal support include:
- The complexity and scope of the transaction.
- Types of services.
- Location and scale of the service.
- Terms and circumstances.
- Additional services.
Dextra Law is a legal firm that provides a full range of legal services for businesses and individuals. Our mission is to become your reliable partner in solving legal issues and to provide you with competent advice and effective solutions.