Business Transaction Terms

The process of one company buying another company or business.

A contract that outlines the terms of a transaction in which a buyer purchases assets from a seller.

A financial statement that shows a company’s assets, liabilities, and equity at a specific point in time.

 A professional who assists in the sale or purchase of a business.

A written document that outlines a company’s goals, strategies, and financial projections.

The amount of cash generated or consumed by a business during a specific period of time.

The final stage of a business sale, in which the transaction is completed and ownership of the business or entity is transferred to the buyer.

A legal agreement that requires the parties involved in a business transaction to keep certain information confidential.

The process of conducting a thorough investigation of a business before purchasing it.

A portion of the purchase price that is contingent on the business achieving certain performance targets after the sale within a certain specified period.

(Earnings before interest, taxes, depreciation, and amortisation): A measure of a company’s profitability that excludes the cost of finance and capital assets utilised.ter the sale within a certain specified period.

The value of a company’s assets minus its liabilities.

An account held by a third party that holds funds or assets until certain conditions are met.

The price at which a willing buyer and willing seller would agree to a transaction in an open market, where neither party is under any obligation or compulsion to sell or acquire..

The process of examining a business’s financial records and verifying their accuracy.

Documents that show a company’s financial performance and position, including its income statement, balance sheet, and cash flow statement. Usually, those lodged with a regulatory body (ASIC or ATO).

A business that is expected to continue operating in the future.

 The intangible value of a business assets, such as its reputation, customer relationships, client servicing rights and brand recognition.

The total revenue generated by a business before expenses are deducted.

A legal obligation to compensate another party for losses or damages if specified events occur or don’t occur.

A document that provides detailed information about a business being sold, including its financial performance, operations, and potential risks and opportunities.

Patents, trademarks, copyrights, and other legal protections for a company’s products or services.

A document that outlines the basic terms of a proposed transaction between a buyer and seller. Also known as Non-Binding Indicative Offer (NBIO).

The debts and obligations owed by a company.

The amount of money a business earns after deducting expenses and taxes.

 A legal agreement that restricts an individual from competing with a business for a certain period of time.

A legal agreement or Deed  that requires the parties involved in a business transaction to keep certain information confidential.

A legal agreement that prohibits a party from soliciting clients, customers, or employees of the other party, or using an LOI/NBIO to pursuing other parties to generate a higher bid from the bidder or another party.

A call option is a contract between a buyer and a seller to purchase a certain stock at a certain price up until a defined expiration date. The buyer of a call has the right, not the obligation, to exercise the call and purchase the stocks.

Put Option: A put option gives you the right, but not the obligation, to sell a stock at a specific price (known as the strike price) by a specific time – at the option’s expiration.

A financing arrangement in which the seller provides funding to the buyer to complete the purchase of the business.

Specific steps, events, actions that must be taken or occur either pre-post a specific date or event in order for a contract (or parts of a contract) to be valid and binding.

Funds invested in companies from individuals or entities that are not publicly traded.

A financial statement that shows a company’s revenue, expenses, and net income over a specific period of time.

The amount paid by the buyer to the seller for the business.

A legal agreement that restricts certain activities of the buyer or seller after the sale of a business.

The process of assigning the purchase price to the various assets and liabilities of the business.

A contract that outlines the terms of a sale between a buyer and seller.

A measure of a company’s cash flow that includes the owner’s salary and benefits.

A stakeholders holders agreement is the contract between the stakeholders of the entity, and it governs their conduct between each other and in certain situations such as the sale of an interest in the entity and approve limits for changes to critical items. It’s important to get a stakeholder agreement established as soon as possible once there is more than one stakeholder.

A contract that outlines the terms of a transaction in which a buyer purchases shares of a company from a seller.

A transaction in which the buyer purchases all of the outstanding shares of a company’s stock from the seller.

The benefits that result from combining two companies, such as cost savings or increased market share.

A tag along clause gives minority shareholders the right to seek a sale for themselves under the same terms with the same buyer when a majority shareholder is selling their portion of shares. A drag along clause can force minority shareholders to sell their shares when the company is being sold 

Documents that show a company’s income, deductions, and tax liabilities for a specific period of time.

A document that outlines the key terms and conditions of a proposed transaction between a buyer and seller.

The difference between a company’s current assets and current liabilities, representing the funds available or tied up for day-to-day operations.

A statement confirming certain facts, events and information are true and accurate to the best knowledge of the individual giving the warranty.