Warranties In A Share Purchase Agreement

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 6. The seller is allowed to sell the shares to the Buz buyer on the assumption that the sale of shares is in principle the sale of a right, not for the goods, and only in the case where all or almost all of a company`s shares are sold, such a sale may be linked to a transfer of a company. 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 The guarantees and assurances provided by the seller are intended to ensure that the company has, in general, fulfilled its tax obligations in accordance with the rules in force. In theory, it may seem sufficient for the buyer to prove that the seller does not respect the general guarantee that the company has calculated and paid, as required by tax rules. Negotiating guarantees and compensation is an important and complicated process. A share purchase agreement (SPA) is the key document of a share sale and defines the terms of the deal. It contains the provisions determining the agreement and all the guarantees. This guarantee confirms that the seller is the sole and true owner of the shares sold. As a result, the responsibility for guaranteeing sales contracts appears legally or contractually. The legal guarantee is the liability arising from the absence of the expected qualifications in the product, which are subject to the sales contract, and defects that reduce its value2. The target company should not be involved in disputes with the relevant tax authorities at the time of the share purchase agreement. The total issued share capital, i.e. the face value (on face value) of the shares held by the shareholders and, from the buyer`s point of view, is intended to predict the situation of the purchase of the company and, subsequently, it appears that their tax treatment before the transactions was wrong.

In this case, the company may be held responsible for underpaid taxes, interest (which can be high, especially when a tax audit reveals tax errors made a few years earlier), or even additional penalties. It is important that at the time of the share purchase agreement, the target company is not involved in a dispute or participates in an out-of-court settlement of disputes, such as mediation.B.

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