DETERMINING THE SHARE PURCHASE AGREEMENT
The Share Purchase Agreement (SPA) is a crucial step that must be negotiated and finalised before the Completion Accounts can be started. It sets out the accounting policies to be used in the Completion Accounts. These have to be agreed by both parties at this stage, as they will determine the final value of the business and whether that results in you making more from your sale or paying less for your acquisition.
It’s vital that if your sale or purchase is to go ahead smoothly, both sets of accountants and lawyers communicate openly and freely with each other. The SPA needs to nail down all the possible contentious areas, including the basis of any final price adjustments, which are usually focused on working capital, net assets adjustment or net current assets adjustment.