“Can you please eyeball the agreement?”
“Can you please eyeball the agreement?” This is one of my least favourite instructions. It usually means a high-level review is expected, nothing too detailed. But I know that in order for me to truly understand an agreement, I need to spend time reading the details. In M&A deals, the …
What turns up during legal due diligence?
First-time sellers are often surprised by what turns up during legal due diligence conducted by buyers’ lawyers. Buyers’ lawyers will comb through everything and they will flag non-compliance issues that most founders didn’t realise were even a problem. Some common ones: Agreements have lapsed, but business continues as usual No …
When do you need a shareholders’ agreement?
Before there’s conflict, not after. The ideal time is when: – you’re bringing on your first investor – a co-founder is getting equity – someone new joins the shareholding. As the business evolves, it’s worth revisiting the shareholders’ agreement. Businesses change. So do people. Consider this real-life scenario. Two companies, …
How Education Business Owners can Prepare for a Smooth Sale
If you’re planning to sell your education business, taking a few proactive steps now can save months of delay later. Based on my experience working on M&A deals in the education sector, the following are common issues that could slow down your sale and how to rectify them early: 𝟭. …
𝗦𝗲𝗹𝗹𝗲𝗿 𝗳𝗮𝘁𝗶𝗴𝘂𝗲 𝗶𝘀 𝗿𝗲𝗮𝗹. 𝗕𝘂𝘁 𝗯𝘂𝘆𝗲𝗿’𝘀 𝗹𝗮𝘄𝘆𝗲𝗿𝘀 𝗳𝗲𝗲𝗹 𝗶𝘁 𝘁𝗼𝗼.
Yesterday, I came across a post which talked about seller fatigue after prolonged due diligence and multiple rounds of amendments to the sale and purchase agreement. I half-jokingly commented that buyer’s lawyers feel the same too. The truth is, a lot of the delay could be avoided if complete and …
Sellers’ safeguards when selling their companies: The disclosure letter
When sellers sell their companies, the focus is usually on the big-ticket terms in the sale and purchase agreements (SPA) – price, payment terms, earn-outs. However, the disclosure letter is where the risk gets managed, and it’s often rushed. This is the document where sellers set out exceptions to the …
What are buyers looking for during legal due diligence when acquiring companies?
Buyers don’t expect everything to be perfect, but they do want to know exactly what they are getting. When they bring in lawyers to conduct legal due diligence, they are asking questions such as: ● What contracts have the companies entered into? How do the contracts help or hinder future …
Worried about the sellers’ representations and warranties in an SPA?
Most founders I speak with are not trying to mislead buyers. What they are concerned about is accidentally leaving out something important in the disclosure letter, which is the document that sets out exceptions to the representations and warranties given by sellers (Sellers’ Warranties) in a sale and purchase agreement …
When planning for a sale, founders should sort out their employment or service contracts early.
A buyer acquiring a company may want key personnel to stay on after completion to continue providing their expertise to the company. Sometimes that includes the founder. In many deals, the sale and purchase agreement (SPA) requires the seller to deliver a signed employment or service contract with these key …
When selling your company, this is often the first legal hurdle
One of the first things buyers’ lawyers look at during legal due diligence is whether the business owners or sellers own the shares they say they do. Some sellers provide a Companies Commission of Malaysia (CCM) search to show their ownership. However, from a legal perspective, this is not sufficient. …