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Business Buyout Agreement

Business Buyout Agreement Template for India

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Key Requirements PROMPT example:

Business Buyout Agreement

"I need a Business Buyout Agreement for acquiring a mid-sized IT services company in Bangalore, with specific provisions for protecting intellectual property rights and managing the transition of 200+ employees, planned for completion by March 2025."

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Document background
The Business Buyout Agreement is a crucial legal instrument used in India when one party intends to acquire complete ownership of an existing business from another party. This document is essential for both private and public companies engaging in business transfers within the Indian jurisdiction. It must comply with various Indian regulations, including the Companies Act 2013, Income Tax Act 1961, and Competition Act 2002. The agreement typically includes detailed provisions for asset transfer, employee transitions, liability assumptions, and post-closing obligations. It's particularly important in scenarios involving complete business acquisitions, mergers, or restructuring, where comprehensive documentation of the transaction terms, conditions, and warranties is necessary to protect all parties' interests and ensure regulatory compliance.
Suggested Sections

1. Parties: Identification of the seller(s) and buyer(s) with complete legal details

2. Background: Context of the transaction, including brief business description and purpose of the agreement

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including what is being sold and purchased

5. Purchase Price: Details of the consideration, payment terms, and adjustment mechanisms

6. Conditions Precedent: Conditions that must be satisfied before completion

7. Completion: Process and requirements for closing the transaction

8. Seller's Warranties: Representations and warranties regarding the business, assets, and liabilities

9. Buyer's Warranties: Representations and warranties from the buyer, including capacity to purchase

10. Pre-Completion Obligations: Obligations of both parties between signing and completion

11. Post-Completion Obligations: Ongoing obligations after the transaction closes

12. Indemnification: Indemnity provisions protecting parties against breaches and specified risks

13. Confidentiality: Provisions regarding confidential information and public announcements

14. Dispute Resolution: Mechanisms for resolving disputes between parties

15. Governing Law: Applicable law and jurisdiction

16. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

Optional Sections

1. Employee Matters: Terms regarding transfer of employees and related obligations - required when employees are part of the transaction

2. Intellectual Property: Specific provisions for IP transfer and protection - needed when IP is a significant asset

3. Real Estate: Provisions regarding property transfer - required when real estate is included in the sale

4. Environmental Matters: Environmental warranties and indemnities - needed for businesses with environmental risks

5. Tax Matters: Specific tax-related provisions and allocations - important for tax-intensive transactions

6. Competition/Antitrust: Provisions regarding regulatory approvals - required for larger transactions

7. Transition Services: Terms for post-completion support services - needed when seller will provide ongoing support

8. Non-Compete: Restrictions on seller's future business activities - important for protecting goodwill

9. Earn-out Provisions: Structure for additional payments based on future performance - used in performance-based deals

10. Financing Provisions: Terms related to transaction financing - needed when purchase is externally funded

Suggested Schedules

1. Business Assets Schedule: Detailed list of all assets included in the sale

2. Excluded Assets Schedule: List of assets specifically excluded from the sale

3. Financial Statements: Recent financial statements of the business

4. Contracts Schedule: List of material contracts being transferred

5. Employee Schedule: Details of transferring employees and their terms

6. Intellectual Property Schedule: List of all IP rights included in the sale

7. Properties Schedule: Details of real estate and leases

8. Permits and Licenses: List of governmental authorizations and licenses

9. Purchase Price Adjustment Mechanism: Detailed methodology for price adjustments

10. Completion Obligations: Detailed list of completion deliverables

11. Warranties Schedule: Detailed warranties and any qualifications

12. Tax Indemnity Schedule: Specific tax-related indemnities and allocations

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Accounting Standards
Accounts
Actual Completion Date
Adjustment Amount
Affiliate
Agreed Form
Agreement
Annual Accounts
Assets
Board
Business
Business Day
Business Information
Business Intellectual Property
Business Plan
Buyer
Claim
Companies Act
Completion
Completion Date
Completion Payment
Confidential Information
Consideration
Control
Data Protection Laws
Disclosed
Disclosure Letter
Encumbrance
Environmental Laws
Environmental Permits
Escrow Account
Escrow Agent
Excluded Assets
Financial Statements
Financial Year
Fundamental Warranties
Governmental Authority
Group
GST
Indemnified Party
Indemnifying Party
Indian GAAP
Intellectual Property Rights
Key Employees
Law
Leased Properties
Liabilities
Licensed Intellectual Property
Long Stop Date
Loss
Management Accounts
Material Adverse Change
Material Contracts
Net Working Capital
Owned Properties
Parties
Permits
Permitted Encumbrances
Purchase Price
Related Party
Relevant Period
Representatives
Rupees
Seller
Seller's Group
Seller's Knowledge
Seller's Warranties
Signing Date
Subsidiary
Tax
Tax Authority
Tax Return
Third Party
Transaction
Transaction Documents
Transfer
Transferring Employees
Warranties
Working Capital
Clauses
Sale and Purchase
Purchase Price
Payment Terms
Assets Transfer
Liabilities Assumption
Conditions Precedent
Completion Mechanics
Pre-Completion Obligations
Post-Completion Obligations
Seller Warranties
Buyer Warranties
Employee Matters
Intellectual Property
Real Property
Confidentiality
Non-Competition
Non-Solicitation
Indemnification
Tax Matters
Environmental Compliance
Regulatory Compliance
Assignment and Transfer
Force Majeure
Dispute Resolution
Governing Law
Jurisdiction
Notices
Entire Agreement
Amendment and Waiver
Severability
Costs and Expenses
Third Party Rights
Further Assurance
Counterparts
Data Protection
Insurance
Business Contracts
Asset Maintenance
Working Capital Adjustment
Earn-out Provisions
Termination Rights
Transition Services
Bank Accounts
Books and Records
Inventory
Customer Relations
Supplier Relations
Legal Compliance
Financial Statements
Material Adverse Change
Authority and Capacity
Due Diligence
Encumbrances
Relevant Industries

Manufacturing

Information Technology

Retail

Healthcare

Real Estate

Professional Services

Hospitality

E-commerce

Financial Services

Education

Logistics

Construction

Media and Entertainment

Telecommunications

Automotive

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Risk Management

Executive Leadership

Business Development

Strategy

Tax

Corporate Secretarial

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Business Development Manager

Corporate Lawyer

Company Secretary

Finance Director

Mergers & Acquisitions Manager

Business Owner

Legal Counsel

Investment Banker

Risk Manager

Compliance Officer

Due Diligence Manager

Transaction Advisory Manager

Industries
Companies Act, 2013: Primary legislation governing company operations and business transfers in India, including procedures for share transfers, asset sales, and corporate restructuring
Income Tax Act, 1961: Covers tax implications of business transfers, including capital gains tax, business transfer tax, and other tax liabilities arising from the buyout
Competition Act, 2002: Regulates combinations and mergers, requiring notification to and approval from the Competition Commission of India for transactions exceeding specified thresholds
Indian Contract Act, 1872: Provides the fundamental principles of contract formation, validity, and enforcement that will govern the buyout agreement
Transfer of Property Act, 1882: Governs the transfer of immovable property and assets as part of the business buyout
Industrial Disputes Act, 1947: Addresses employee rights and obligations during business transfers, including continuation of service and protection of employee interests
Registration Act, 1908: Governs the registration requirements for transfer of property and certain types of business assets
Stamp Act (State-specific): Determines the stamp duty payable on the transfer documents and agreements
FEMA (Foreign Exchange Management Act), 1999: Relevant if the buyout involves foreign investors or cross-border transactions
The Sale of Goods Act, 1930: Governs the transfer of movable property and inventory as part of the business assets
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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