When a company acquires all or a substantial portion of the shares of a target company, that investor also acquires its debts. As a result, a capital transaction is usually accompanied by full due diligence (“DD”), not only to understand the potential commitments of the purchaser, but also to clarify important information about the seller, such as its actual asset base. B its asset base (fixed assets, contracts, finance, human resources and clients, etc.). DD is a basic review or review of a target entity conducted by a buyer to compile and evaluate information that has a direct impact on the acquisition decision. From a legal perspective, DD is generally executed with respect to corporate documents, general rights and litigation to which the affected entity is associated, intellectual property (“IP”) and trade secrets, work, money laundering, anti-corruption, data protection, environmental compliance and other regulatory obligations that may be relevant to the specific sector of the target entity. DD is also managed by accountants and accountants regarding the finances of the target entity. In the operations of R and DD must be carried out in several jurisdictions and carefully coordinated in order to verify the actual assets and liabilities of the objective with regard to the laws and uses of each site. The purchase reflection describes the total counter-benefit that the buyer must pay to the seller. In addition, all adjustments that need to be made in the purchase price will be reviewed. It provides a full detail of payment times after the closing date and specifically contains serious money deposited into the trust account, merits, third-party financing, working capital required at the time of closing, etc. In this section, both the buyer and the seller must indicate facts called “representations” and then “guarantee” that the statements are true. This is one of the largest and longest parts of the agreement and is the subject of extensive negotiations. Specific meanings should be assigned to certain words in each contract, in order to be precise or change the meaning of words, as they are commonly used in certain sectors or contexts.

While certain words or phrases may be defined in the text body of a contract, all words or phrases with critical, ambiguous meanings or long definitions or explanations should be included in the Definitions section. This is especially useful for recurring words, phrases or concepts. Any defined term should first be in quotation marks, so it is clear that this is a defined term, bold (so it is easy to find) and capitalize the first letter of each defined word, so that it is clear, throughout the agreement, that if the word is in such a form, it is actually a defined term and may be less easily misunderstood (as is the case in this article). Like what. B “part” is a defined term referring to a party, it will avoid confusion if the word “part,” all in tiny, is used to refer to a part other than a part.