If the guarantees are beneficial, the party it gives must be able to support them. When a buyer buys shares, all the guarantees given by the seller are given by him personally. When a company or individual buys or sells shares of the company with another company or person, it must use a share purchase agreement. For example, if a company has two partners, it has the same shares, and one leaves the partnership, a share purchase agreement can be used to buy its shares in the company. If all shares are purchased, a sales contract can be used instead. A share purchase agreement (SPA) is a contract that sets out the conditions for the sale and purchase of shares in a company. The interpretation is covered by the share purchase agreement, which contains definitions of all the terms used in the agreement. The sale and purchase of shares are also listed, covering purchase price adjustments, purchase price and dispute resolution. The guarantees and assurances of the buyer and the seller give all the statements that the buyer and the seller sign and claim to be true. Everything related to employees is also covered, including the terms of their benefits and how the accumulated bonuses are managed. The closing of an M&A transaction typically makes a successful DD investigation and the underlying provision of complete and accurate documents a critical condition for closing the acquisition. The conclusion of a robust DD investigation cannot be sufficiently emphasized in most M&A transactions. Target companies are usually heavily constrained to provide an investor with all the materials requested in this regard.
Even a seemingly simple M&A with a small business with limited assets and operations can be accompanied by large hidden debts. In the past, data spaces were the norm and installation on the premises of the target company or its lawyers, where all categories of requested documents were filed for consultation by the buyer. Now, data spaces are usually digital and law firms and other third parties offer internal server- or cloud-based platforms, where all DD documents are uploaded as much as possible by the seller and his advisors for compilation and consultation by a buyer and his professional advisors (usually lawyers and accountants). Access to such information is generally subject to strict confidentiality obligations, so it should be clear who will have access to this information in order to avoid a possible breach of these restrictions. The shareholders` agreement is concluded mainly to resolve problems and disputes between the shareholders and the company. We cannot always be sure that nothing will go wrong, and in such circumstances where nothing is certain, such agreements will help us resolve problems and disputes when they arise and maintain a stable relationship between shareholders and the company. It also contributes to the protection of the investment made by a shareholder and defines the rules and regulations applicable to shareholders and other parties related to the company. A quality SPA cannot make a bad business acquisition well. However, based on a well-negotiated roadmap and effective SD, an SPA is an essential tool for reducing risk at M&A. Experienced and competent lawyers are not only indispensable for establishing a roadmap and designing a SPA (and complementary documents) that sufficiently meet the needs and objectives of the parties to an M&A transaction, but also to manage and coordinate all the moving parts of the business. This article is intended to provide general advice to laymen and lawyers outside of business in order to better understand the complications that can arise at M&A.