[Please note that this is a general summary of our Sale and Purchase of Business / Company Acquisition Agreements and other related documents and does not constitute legal advice. As each jurisdiction may be different, you may want to speak to your local lawyer.]

SUMMARY OF SALE AND PURCHASE OF ASSET / BUSINESS / ACQUISITION OF COMPANY AND RELATED DOCUMENTS TEMPLATES:

Members are often confused about which document to use in relation to Sale and Purchase of Business / Company Acquisition. The following table is a quick reference guide:

Documents	When to Use
NDA - Confidentiality Agreement	One Way Non Disclosure agreement for discussion of Business relationship. It can impose unilateral / mutual obligations of confidentiality on the party who receives the information. It can be in neutral form or in favour of the Discloser / Disclosee.
Memorandum of Understanding (MOU) - Sale of Business	A memorandum of understanding (MOU) in a sale and purchase situation. This represents the good faith intentions of the parties but also includes deposit from the Buyer. This document can be in Neutral Form or in favour of the Buyer / Seller.
Feasibility Study	Form of feasibility study for a foreign investor setting up a new company and making an investment in a new country.
Business Acquisition Agreement	A Business acquisition agreement between a Buyer and a Seller. This can include the Seller's parent or the Buyer's parent as guarantor to the agreement or no guarantor. The Seller's warranties are included in another template. This agreement can be drafted in Neutral Form or in favour of the Buyer / Seller.
Business Acquisition Warranties	Warranties given by a Seller in relation to a Business acquisition. This can be inserted as a Schedule to the Business Acquisition Agreement. These Warranties can be drafted in Neutral Form or in favour of the Buyer / Seller.
Business Acquisition Agreement - Simple	A simple business acquisition agreement between a Buyer and a Seller with no warranties. This is suitable for intra-group transfer.
Assets Acquisition Agreement	An assets acquisition agreement between a Buyer and a Seller. This relates to the transfer of existing / used assets (e.g. equipment but not real property). This agreement can be drafted in Neutral Form or in favour of the Buyer / Seller.
Company Acquisition Agreement	A company acquisition agreement between a Buyer and one to three Seller(s). This can include the Seller's parent or the Buyer's parent as guarantor to the agreement or no guarantor. The Seller's warranties are included in another template. This agreement can be drafted in Neutral Form or in favour of the Buyer / Seller(s).
Company Acquisition Agreement - with Earnout	A company acquisition agreement between a Buyer and a Seller where part of the consideration is calculated by reference to the future performance of the company or Business being purchased (earnout). The Seller's warranties are included in another template. This agreement can be drafted in Neutral Form or in favour of the Buyer / Seller.
Company Acquisition Warranties	Warranties given by Seller(s) in relation to a Company acquisition. This can be inserted as a Schedule to the Company Acquisition Agreement. These Warranties can be drafted in Neutral Form or in favour of the Buyer / Seller.
Company Acquisition Agreement - Simple	A simple company acquisition agreement between a Buyer and a Seller with no warranties. This is suitable for an intra-group transfer.
Disclosure Letter	Disclosure Letter from the Seller to the Buyer relating to sale and purchase of company / Business. This document can be drafted in Neutral Form or in favour of the Buyer / Seller.
Information Memorandum on Sale of Business / Company	Pro forma information memorandum for the sale of Business / Company issued by the broker on behalf of the Seller. It sets out a summary of the Business / Company for sale and can form as part of the disclosure / due diligence documents.
Due Diligence Questionnaire on Acquisition of Company	Due Diligence Questionnaire from a Buyer to the Seller in relation to the acquisition of Business / Company. The Seller will prepare a data room for the Buyer in accordance with the documents required in the Questionnaire.
Due Diligence Form for Contract Review	Pro forma due diligence form for contract review in relation to an acquisition by the Buyer or its legal advisor.
Power of Attorney - Shares Sale	POA for sale of shares in a private company where the Seller gives security interest of the Shares to the Buyer by appointing the Buyer as its Attorney.
Minutes of Meeting of Directors	Minutes of Board of Directors of (i) a Seller approving a sale of Subsidiary to a Buyer; (ii) the Company itself approving the Share Transfer; (iii) the Buyer approving the acquisition of the Company.
Parental Guarantee to Buyer in relation to Acquisition	A guarantee is given by Seller's parent to the Buyer for the Seller's obligations. This is drafted in neutral form.
Completion Agenda on Acquisition of Company	Completion Agenda in relation to the sale / acquisition of shares of a company. It will help to identify the documents to be prepared, the resolutions to pass and the persons required to execute documents on the basis of the Sale and Purchase Agreement.
Merger / Acquisition Announcement / Press Release	A press release regarding a successful acquisition of Target or a merger from the perspective of the Acquirer. It gives a brief background of the target, the potential synergy and future development of the new business entity.

The rule of caveat emptor (Let the Buyer beware) applies to the acquisition of an Asset, Business or Shares. The Buyers typically have less information about what it is purchasing than the Seller, resulting in 'information asymmetry'. As such, the Buyer would typically seek additional protections:

• Buyers investigating the state of the Asset / Business / Company in a "due diligence" process and finding out as much as they can before committing to the terms of the acquisition;
• sale agreements setting out in a lot of detail the precise acquisition terms; and
• the Buyer requiring contractual warranties or representations.

A. ACQUISITION OF ASSETS

The first question to ask in any acquisition - does the Buyer want to buy the Company, whole of the Business or just certain assets and liabilities? There are advantages and disadvantages of acquiring assets.

1. Advantages 

Flexibility - the Buyer may pick the assets it takes on and exclude the liabilities not associated with the target business. 

Contingent Liabilities - to the extent Seller's liabilities or where there is a particularly large contingent liability which cannot be accurately quantified, assets transfer will avoid such liabilities.

Insolvency - if the target company is insolvent, or problems anticipated with the transfer of shares owned by dead, lost or difficult minority shareholders, a transfer of assets will generally avoid these. 

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