Signing

Signing is the point at which the purchase agreement is executed in legally binding form. The parties thereby agree the price, warranties and conditions of the transaction. Transfer of the shares and payment of the purchase price occur at closing. The two steps can coincide, but are separated where approvals or other requirements remain outstanding.

The main commercial and legal issues must therefore be settled before signing. These include the acquisition perimeter, price calculation, financing and treatment of due diligence findings. Once the agreement is signed, a party cannot unilaterally reopen those matters. The seller particularly needs to understand the circumstances in which the buyer may still withdraw.

During the period between signing and closing, the agreed conditions precedent are satisfied. These may include regulatory approvals, counterparty consents or preparations to repay existing facilities. The agreement allocates responsibility for each step and specifies how progress is communicated. A long stop date limits the waiting period and is regularly linked to contractual termination rights.

The seller generally continues to operate the business in the meantime. Consent requirements for exceptional actions can protect the economic basis of the acquisition. At the same time, the buyer must not take control prematurely where this remains prohibited. Preparations for subsequent integration must respect that boundary.

An agreement for German GmbH shares requires notarisation. This does not mean that a separate notarial appointment is always needed for the later closing. For managing the process, the central distinction is between a signed agreement and an acquisition that has actually been completed. The agreement becomes a completed transaction only when the necessary conditions have been satisfied or validly waived and the prescribed completion actions have taken place.

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.