Term Sheet For Sale Of Business for New Zealand

Term Sheet For Sale Of Business Template for New Zealand

A Term Sheet for Sale of Business under New Zealand law is a preliminary document that outlines the key commercial and legal terms for a proposed business sale transaction. This document, while generally non-binding except for specific provisions like confidentiality and exclusivity, serves as the foundation for the subsequent definitive sale and purchase agreement. It captures essential elements including purchase price, payment terms, key assets, conditions precedent, and timing, all within the context of New Zealand's legal framework, particularly considering the Contract and Commercial Law Act 2017 and other relevant legislation.

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What is a Term Sheet For Sale Of Business?

The Term Sheet for Sale of Business is a crucial preliminary document used in New Zealand business transactions to establish the fundamental terms and conditions of a proposed business sale. It serves as a roadmap for the transaction and subsequent detailed documentation, typically used after initial negotiations but before comprehensive due diligence and definitive agreements. While predominantly non-binding, it includes certain binding provisions such as confidentiality and exclusivity. The document is designed to comply with New Zealand legal requirements and business practices, incorporating considerations from relevant legislation such as the Contract and Commercial Law Act 2017, Companies Act 1993, and Fair Trading Act 1986. It provides a clear framework for negotiation and helps identify potential issues early in the transaction process.

What sections should be included in a Term Sheet For Sale Of Business?

1. Parties: Identification of the seller and purchaser, including full legal names and company details

2. Background: Brief context of the transaction and purpose of the term sheet

3. Definitions: Key terms used throughout the document

4. Transaction Structure: Whether assets or shares are being sold, and basic structure of the deal

5. Purchase Price: The amount and structure of consideration, including any adjustments and payment terms

6. Key Assets: Overview of main assets included in the sale

7. Key Conditions: Essential conditions precedent to completion of the transaction

8. Timing: Key dates including due diligence period, definitive agreement signing, and completion

9. Exclusivity: Terms of exclusive negotiation period

10. Confidentiality: Obligations regarding confidential information

11. Costs: Allocation of transaction costs between parties

12. Non-Binding Nature: Clear statement of which provisions are binding and non-binding

13. Governing Law: Specification of New Zealand law as governing law

What sections are optional to include in a Term Sheet For Sale Of Business?

1. Employee Matters: Terms regarding treatment of employees, used when staff transfers are a significant aspect

2. Intellectual Property: Specific provisions for IP transfers, used when IP is a key asset

3. Environmental Matters: Environmental considerations and obligations, used for businesses with environmental impacts

4. Regulatory Approvals: Required approvals from regulatory bodies, used when specific regulatory clearance is needed

5. Working Capital: Working capital adjustment mechanisms, used in larger or more complex transactions

6. Earn-out Provisions: Structure of any earn-out payments, used when part of purchase price is performance-based

7. Real Estate: Property-related provisions, used when real estate is a significant component

8. International Considerations: Cross-border elements, used for international transactions

9. Key Customer/Supplier Contracts: Treatment of major contracts, used when specific contracts are crucial to the business

What schedules should be included in a Term Sheet For Sale Of Business?

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

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

3. Key Contracts Schedule: List of material contracts to be transferred

4. Intellectual Property Schedule: Details of IP assets included in the sale

5. Employee Schedule: List of employees and key employment terms

6. Purchase Price Calculation: Detailed breakdown of purchase price components and adjustments

7. Required Consents: List of third-party consents needed for the transaction

8. Due Diligence Requirements: Outline of due diligence requirements and process

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

New Zealand

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Manufacturing

Technology

Healthcare

Hospitality

Professional Services

Construction

Agriculture

Transport and Logistics

Education

Real Estate

Financial Services

Media and Entertainment

Mining and Resources

Energy

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Executive Leadership

Business Development

Commercial

Strategy

Tax

Compliance

Due Diligence

Relevant Roles

Chief Executive Officer

Managing Director

Business Owner

Corporate Lawyer

General Counsel

Chief Financial Officer

Finance Director

Business Development Manager

Investment Banker

Merger & Acquisition Specialist

Company Secretary

Commercial Director

Business Broker

Private Equity Manager

Transaction Advisory Manager

Due Diligence Manager

Industries
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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