Closing

Closing is the point at which a transaction is actually completed and shares or assets pass in exchange for payment of the purchase price. It does not necessarily coincide with signing, because the conditions precedent have to be satisfied in between. If no completion requirements remain outstanding, signing and closing can also occur in immediate succession.

Before closing, the parties check whether the agreed requirements have been satisfied or validly waived. These may include regulatory approvals, consents from key counterparties, internal resolutions and the availability of financing. The parties cannot waive a statutory prohibition on completion. On the closing day, they work through an agreed checklist covering evidence of satisfied conditions, signatures, payments, transfer steps and any required registry filings. The buyer needs to obtain the agreed rights of control, while the seller should receive the purchase price due. The sequence agreed in the contract protects each party against performing without receiving the consideration due.

The sequence is recorded in a closing memorandum documenting the satisfaction of all conditions and the steps taken. If a condition is not met by the long stop date, any termination rights depend on the contractual terms. Operational integration can begin after closing. Planning usually starts earlier. The flow of funds on the completion date also needs settling, since purchase price, repayment of existing financing and release of security must be coordinated.

Note: This explanation is for general information only and does not constitute legal advice. The legal position depends on the individual case and may change with new legislation or case law. For a binding assessment, please consult a qualified lawyer.