Entity Purchase Agreement for the United Kingdom

Entity Purchase Agreement Template for England and Wales

An Entity Purchase Agreement is a legally binding contract governed by the laws of England and Wales that documents the sale and purchase of a business entity. It sets out the terms and conditions of the transaction, including purchase price, payment terms, warranties, indemnities, and completion mechanics. The agreement typically includes detailed provisions protecting both buyer and seller, addressing matters such as employee transfers, intellectual property rights, and ongoing liabilities.

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What is a Entity Purchase Agreement?

The Entity Purchase Agreement is the primary transaction document used when acquiring or selling a company or business in England and Wales. It is essential for both private and public company acquisitions, providing a comprehensive framework for the transfer of ownership. The agreement covers crucial aspects including purchase price mechanics, warranties about the target business, tax covenants, and post-completion obligations. It's particularly important for ensuring compliance with UK company law and establishing clear rights and obligations between the parties.

What sections should be included in a Entity Purchase Agreement?

1. Parties: Identification of buyer, seller, and any guarantors involved in the transaction

2. Background: Context of the transaction and high-level description of the target entity and business rationale

3. Definitions: Defined terms used throughout the agreement including key commercial, legal and technical terms

4. Sale and Purchase: Core transaction terms including purchase price, payment mechanics, and transfer provisions

5. Conditions Precedent: Any conditions that must be satisfied before completion can occur

6. Pre-Completion Obligations: Obligations of the parties between exchange and completion, including conduct of business provisions

7. Completion: Mechanics and requirements for closing the transaction, including timing and logistics

8. Warranties: Seller's representations about the target entity, its business and assets

9. Limitations on Liability: Caps, thresholds, time limits and other limitations on warranty claims and seller liability

10. Post-Completion Obligations: Ongoing obligations after completion, including non-compete and confidentiality provisions

11. General Provisions: Standard boilerplate clauses including notices, entire agreement, and governing law

What sections are optional to include in a Entity Purchase Agreement?

1. Tax Covenant: Specific tax indemnities and arrangements for pre-completion tax liabilities

2. Property Provisions: Specific provisions relating to real estate assets and property matters

3. Employee Provisions: Specific provisions relating to employees, including TUPE implications

4. Intellectual Property Provisions: Specific provisions relating to IP rights and protection

5. Regulatory Compliance: Specific provisions relating to regulatory approvals and compliance

What schedules should be included in a Entity Purchase Agreement?

1. Target Company Details: Corporate information about the target entity including shareholding structure

2. Completion Obligations: Detailed list of documents and actions required at completion

3. Warranties: Comprehensive list of warranties about the target business and assets

4. Properties: Details of all real estate owned or leased by the target

5. Intellectual Property: Schedule of all IP rights owned or licensed by the target

6. Material Contracts: List and details of key commercial agreements

7. Employees: Details of employees, including key terms and benefits

8. Tax Schedule: Specific tax-related warranties and indemnities

9. Permitted Leakage: List of permitted value extractions in locked box deals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Clauses
Industries

Companies Act 2006: Primary legislation governing company operations, including share transfers, company registration, directors' duties, and corporate authority requirements

Financial Services and Markets Act 2000: Regulations for financial services, including regulated activities and financial promotion rules

Law of Property (Miscellaneous Provisions) Act 1989: Fundamental contract law principles affecting property transactions and formal requirements for contracts

Transfer of Undertakings (Protection of Employment) Regulations 2006: Employment law regulations protecting employees' rights during business transfers (TUPE)

Employment Rights Act 1996: Core employment rights legislation affecting employee transfers in business acquisitions

Corporation Tax Act 2010: Tax legislation governing corporate taxation aspects of entity purchases

Taxation of Chargeable Gains Act 1992: Legislation covering capital gains tax implications in entity sales and purchases

Value Added Tax Act 1994: VAT considerations in entity purchases and business transfers

Competition Act 1998: Legislation governing competition law and merger control

Enterprise Act 2002: Framework for merger control and competition regulation in business acquisitions

UK GDPR: Data protection regulations affecting personal data transfers in business acquisitions

Data Protection Act 2018: UK's implementation of data protection requirements, including provisions for business transfers

Modern Slavery Act 2015: Compliance requirements regarding modern slavery and human trafficking in business operations

Stamp Duty Land Tax legislation: Tax provisions affecting property aspects of entity purchases

Pensions legislation: Various pension regulations affecting employee benefits and pension schemes in business transfers

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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