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Sale Of Business Contract for Germany

Sale Of Business Contract Template for Germany

A comprehensive legal agreement governed by German law that facilitates the transfer of ownership of a business from one party to another. This document encompasses all aspects of the business sale transaction, including asset or share transfer, purchase price mechanisms, warranties and representations, employee matters under German labor law, and post-completion obligations. It adheres to German Civil Code (BGB) requirements and incorporates relevant provisions from the German Commercial Code (HGB), ensuring compliance with local corporate, tax, and competition laws. The agreement typically includes detailed schedules covering assets, liabilities, employees, and other crucial business elements.

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What is a Sale Of Business Contract?

The Sale of Business Contract is a crucial document used when transferring ownership of a business entity in Germany, whether through an asset or share sale. This comprehensive agreement is essential for both large corporate transactions and SME sales, requiring careful consideration of German legal requirements, including the Civil Code (BGB), Commercial Code (HGB), and corporate laws. The document addresses key aspects such as purchase price determination, warranty provisions, employee transfers under TUPE regulations, tax implications, and competition law considerations. It's particularly important as it must comply with strict German documentation requirements and often requires notarization for certain provisions, especially when real estate is involved. The contract serves as the primary document governing the rights and obligations of all parties involved in the business transfer, including post-completion obligations and potential earn-out mechanisms.

What sections should be included in a Sale Of Business Contract?

1. Parties: Identification of the seller(s) and buyer(s), including full legal names and addresses

2. Background: Context of the transaction, brief description of the business, and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Sale and Purchase: Core transaction terms including what is being sold (assets or shares) and the basis of sale

5. Purchase Price: Purchase price, payment terms, adjustments, and earn-out provisions if applicable

6. Conditions Precedent: Conditions that must be satisfied before completion can occur

7. Pre-Completion Obligations: Obligations of both parties between signing and completion, including conduct of business requirements

8. Completion: Mechanics of completion, including timing, location, and actions required

9. Warranties: Seller's warranties regarding the business, assets, and liabilities

10. Limitations on Seller's Liability: Limitations on warranty claims and general liability caps

11. Tax Matters: Tax covenants, indemnities, and arrangements for tax filings

12. Employees: Treatment of employees, TUPE provisions, and related obligations

13. Restrictive Covenants: Non-compete and non-solicitation provisions

14. Confidentiality: Obligations regarding confidential information and announcements

15. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

What sections are optional to include in a Sale Of Business Contract?

1. Real Estate: Required when the business includes owned or leased property, covering property transfers or lease assignments

2. Intellectual Property: Detailed provisions for IP transfer when the business has significant IP assets

3. Data Protection: Specific provisions for handling personal data transfer when significant customer or employee data is involved

4. Environmental Matters: Required for businesses with environmental risks or compliance obligations

5. Pensions: Needed when the business has pension schemes or retirement benefit obligations

6. Third Party Consents: Required when material contracts need consent for transfer

7. Earn-out Provisions: Detailed mechanics when part of purchase price is contingent on future performance

8. Transition Services: Required when seller will provide post-completion services to the business

What schedules should be included in a Sale Of Business Contract?

1. Business Assets: Detailed list of all assets included in the sale

2. Excluded Assets: List of assets specifically excluded from the sale

3. Properties: Details of owned and leased properties

4. Intellectual Property Rights: Schedule of all IP rights owned or used by the business

5. Employee Information: List of employees and their key employment terms

6. Material Contracts: Summary of key business contracts

7. Warranties: Detailed warranties given by the seller

8. Completion Requirements: Detailed list of completion deliverables

9. Purchase Price Adjustment: Detailed mechanics for any price adjustment

10. Tax Covenant: Detailed tax indemnity provisions

11. Disclosed Matters: List of matters disclosed against the warranties

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Germany

Document Type

Sales Agreement

Sector

Sales

Cost

Free to use

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