This post begins a series of posts on business Purchase and Sale Agreements. Even though I have executed a number of Business Purchase and Sale Agreements in my investing career, this series falls in the category of “teaching what you want to learn” as I want to become even more knowledgeable It helps to write about something to clarify your thoughts and understanding. I expect to expand the topics of this series in the future, but here is my initial list of what I hope to cover and please suggest additional topics:
- Asset Sale versus Stock Sale
- Section 338(h)(10) and Section 338(g) elections
- Personal Goodwill
- Working Capital Adjustments
- Hold backs, escrow, and recovery by buyers
- Representations & Warranties
- Knowledge, Materiality, and Other Important Terms
- Closing Conditions
- “cash free / debt free”
- Form 8494
The goal of this series will be to give you enough information to begin asking questions of your legal counsel.
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