Completion accounts
A purchase-price mechanism with a subsequent adjustment based on closing accounts drawn up as at the completion date.
With completion accounts a provisional purchase price is paid at closing and then adjusted on the basis of a balance sheet prepared as at the completion date. Adjustments are typically made for net debt and working capital. The final price thus reflects the actual financial position at handover.
Unlike the locked box, here the seller bears the economic risk up to closing. The share purchase agreement sets out the accounting principles, deadlines for preparation and objections and an expert-determination procedure in case of dispute over the closing accounts.
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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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Locked box
A purchase-price mechanism in which the price is based on a fixed, historic reference date and is not adjusted after closing.
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Earn-out
A variable component of the purchase price that depends, after closing, on the future economic performance of the target company.
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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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Share purchase agreement (SPA)
The central agreement governing the acquisition of a business (share or asset deal), covering the object of sale, purchase price, warranties and completion.
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