South Africa:Business sale

About these documents:

These are agreements for the sale of any type of business by either a limited liability partnership, a company, a by one or more individuals.  Net Lawman also host agreements for sale of a company, with or without a business.

First, we cover matters common to most or all of the agreements, then we look at each document in turn. 

Who will use these documents?

An individual or company selling or buying a business or enterprise of any type.  It is most common for the Buyer to provide the legal agreement. However, Sellers gain an advantage by obtaining the agreement first and making the first negotiation steps in their favour.

Key features

• suits any type of trade or business;
• extensive use of warranties to encourage full disclosure by the seller
  Note: warranties have been used only so far as appropriate to the subject matter of the sale;
• designed for the deal to be completed on the same day, not at some future time;
• purchase price apportioned among the assets to simplify tax planning;
• comprehensive list of matters to be done before completion and documents to be handed to the buyer;
• full account taken (for Internet businesses) of intellectual property issues such as domain name transfers and web site hosting;
• provisions to inhibit the seller setting up in competition;
• terms to cover transfer of leasehold and freehold property (if applicable);
• choose from up to 90 individual warranties where required.

These documents (except ZA-COM771 and ZA-COM781) include provisions for:

• terms of the agreement for sale and list of subject matter of sale;
• provision of purchase price, when and how it is to be paid;
• practical steps required to complete the transaction;
• dealing with counting and hand over of stocks;
• responsibility for creditors and debtors;
• seller’s warranties;
• seller’s future activities;
• mediation of a dispute before court action;
• other legal issues to negotiate and account for.

The 90 individual warranties are in sections relating to:

A          Assets

B          Stocks             

C          Accounts

D          Employees

F          Licences, consents and passwords                    

G          Insurance                     

H          Joint ventures and partnerships  

J           Statutory restrictions

K          Litigation

L          Sellers activities

M         Contracts

N          Defective products and services liabilities

P          Freehold properties

Q          Leasehold properties

R          Intellectual property

S          Internet domain names

T          General