Stage 8 of 9

Signing

By the time documents are signed, most of the decisions have already been taken. The signing itself is administrative, which is why it often feels anticlimactic.

The documents

• The purchase agreement, with the warranties and their limits
• Schedules: what exactly is included and what is not
• Any disclosure letter, which qualifies the warranties
• The transfer deed, where a company or shares change hands
• Agreements for anything continuing: support, an earn-out, a lease

Warranties in plain terms

Warranties are statements about the state of the business. If one turns out to be wrong, the buyer can claim. Their scope, their duration and the cap on liability are the three numbers a seller should be able to recite from memory.

Anything the seller knows to be an exception belongs in the disclosure letter. Disclosing an issue removes liability for it; hiding it does the opposite.

Signing and completion

The two are often the same day for small transactions and weeks apart where conditions remain outstanding. In the gap the business is still run by the seller, usually under agreed restrictions on what may be changed.

The anticlimax

Owners frequently report feeling nothing at all on the day. The reaction, when it comes, tends to arrive a few weeks later, on an ordinary morning with nothing in the calendar.

Anything disclosed is not a liability. Anything hidden becomes one.