Change of control
A contract clause granting a contracting party special rights (such as termination or consent) on a change of control in the other company.
Change-of-control clauses appear in the target company contracts, for example in loan, supply, licence or lease agreements. If control changes, for instance through a share deal, the counterparty may have a right of termination or consent. Such clauses must be identified systematically during the due diligence.
Required consents are regularly included as a condition precedent in the share purchase agreement, so that closing does not trigger the loss of essential contracts. In an asset deal the same issue arises as a question of contract assignment with the counterparty consent.
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This explanation gives a general overview of Austrian law and does not replace advice in an individual case. The specific circumstances of your transaction are always decisive.
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Share deal
Acquisition of a business by purchasing the shares (for example GmbH shares) in the legal entity, which continues with all its assets and liabilities.
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Conditions precedent
Suspensive conditions that must be satisfied between signing and closing before the transaction is completed.
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Due diligence
The careful examination of the target company before the purchase from a legal, tax, financial and operational perspective.
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Closing
The completion of the transaction at which, once all conditions are satisfied, the shares are transferred and the purchase price is paid.
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