As a result, the representations and guarantees that determine certain qualifications of the target company, such as the target company. B, are well established, has the necessary authorizations and licences to carry out its activities, has the right to use the assets necessary to maintain its activities in accordance with the law and it carries out its activities in accordance with the law and are included in the stock sales contracts. Due to the inadequacy of TCO`s provisions regarding sales contracts relating to share sale contracts, the parties generally attempt to detail potential issues10. Accordingly, the insurance and guarantees concerning the target company, the extent of the seller`s liability for the target company and their results must be formulated in detail, in accordance with the will of the parties in the share purchase agreements. Finally, I would like to say that advice on the presentation of a contract for the sale of assets or shares is essential to ensure a balanced agreement between the buyer and the seller and whether both parties are aware of their potential commitments. Buz assumes that the sale of shares is essentially the sale of a right, not for property, and only if all or almost all of a company`s shares are sold, such a sale may be linked to a transfer of a business. Buz points out that, in such a case, the defects of such a company are considered to be defects of the shares and that the seller is responsible for those defects.6 Below we look at common guarantees and what they mean for a buyer under a share purchase agreement. From the sellers` point of view, they should ensure that all references to representation are removed from the OSG, as well as a comprehensive comprehensive agreement clause to exclude any false, innocent or negligent representation based on guarantees contained in the agreement. A guarantee is a contractual declaration of the state or condition of the business of the company or business acquired at a given time.
The seller gives guarantees to the buyer. Representations seem to be very similar to guarantees in a sales contract, but there are significant differences; a breach of the warranty described above gives rise to a contractual right, while a violation of representation results in a claim under the law of misrepresentation. At the time of the share purchase agreement, the target company should have filed all tax returns and provided all necessary information regarding these tax returns. A charge means any charge, interest, rights or rights that interfere with the use or ability to transfer shares, for example. B security interests. Since the legislation does not provide for differentiation based on the issuance of quotas constituting sales shares, this would not affect valuations in this regard.8 Where the share purchase agreement contains a compensation clause, the occurrence of a specific event leading to the seller`s liability provides a sufficient basis for the buyer`s claim. These events may include, for example, the decision to assess the amount of the underpaid tax and the obligation to pay the resulting tax, without the purchaser having to prove other circumstances of the event. A key document in transactional practice is the share purchase agreement (or SPA). This document contains provisions that govern, among other things, the terms of the transaction, the payment of the price and the financial accounts between the parties, their obligations and responsibilities. This is the main document negotiated between the parties to cover tax issues.