What Exactly Is Sold in an M&A Transaction

When buying an interest in an LLC, the new owner enters an existing company together with its property, contracts, employees, receivables and payables. When buying individual assets or part of a business, the parties transfer only what is expressly listed in the agreement. The owner chooses the option according to what must continue operating after the transaction.

Before negotiations, the seller prepares a clear list of what is being sold: the ownership interest, real estate, equipment, goods, domain, trade mark, customer contracts and other valuable components. The buyer can immediately see what belongs to the LLC itself, what belongs personally to the owner and what is used under a lease or another contract.

The buyer also needs to know which obligations remain after the change of ownership. A supplier debt, loan, court case, tax issue or obligation to perform an already signed contract can affect the price. These items are either reflected in the value or the parties agree separately who will perform the obligation and when.

When buying an interest in an LLC, the buyer acquires corporate rights together with the company's property, contracts and obligations. Before payment, the buyer therefore needs information about debts, litigation, taxes, pledges, key contracts and the seller's authority. If only individual assets are purchased - equipment, real estate, a trade mark or customer contracts - the parties list them expressly in the agreement and define exactly what transfers to the buyer.

Price, Payment and Parties' Documents

The buyer needs information on who owns the interest, who has authority to sell it, which resolutions have been adopted by the members and director, what property belongs to the company and which contracts generate the main income. Financial statements and banking data help compare stated revenue with actual cash receipts, while accounting records help identify debts and taxes.

Real estate, equipment, inventories, intellectual-property rights, employees and key counterparties are considered separately. For a business dependent on one major customer or supplier, the owner needs to know whether that contract will continue after a change of control. For leased premises, it is necessary to know whether the lease remains in force for the required period.

It is advantageous for the seller to prepare these documents before negotiations. The buyer can then confirm the figures faster and the parties spend less time disputing matters that are not documented. UBC can prepare a plain-language business review for the buyer: what the buyer receives, which debts remain and what should be reflected in the price.

For the sale of an interest in a Ukrainian LLC, the owner takes account of the charter and the pre-emption rights of other members. Law No. 2275-VIII provides a member with a pre-emption right to acquire an interest sold to a third party. The charter or a corporate agreement may establish a different procedure. If the acquisition of corporate rights constitutes a concentration under Law No. 2210-III and reaches the statutory thresholds, approval from the Antimonopoly Committee is obtained before the concentration is implemented. The seller therefore takes these rules into account before agreeing the final sale date.

Transfer of Management, Assets and Contracts

The price may be fixed as one amount or may depend on agreed indicators at the sale date. The owners should state expressly how much the buyer pays, when payment is made, in which currency and which documents the buyer receives in exchange. If part of the price is paid later, the agreement should explain the amount, date and conditions of that payment without unnecessarily complicated English-language constructions.

Together with the interest or assets, the buyer must actually receive what the business was purchased for: corporate documents, accounting records, contracts, keys and access credentials, and contacts of employees and counterparties. The new owner decides whether to retain the existing director and team, while the seller transfers the documents and property to the extent specified in the agreement.

UBC can support a purchase or sale from collection of source information through the agreement, settlements and registration of the ownership change. The buyer receives the business or assets described in the documents before payment, while the seller receives the agreed price and confirmation of transfer. After completion, the new owner can immediately manage the company and work with the bank, employees and counterparties.

The value of a business depends on profit, assets, debts, contracts and the rights that pass to the buyer. The owner may agree one amount for the entire interest or link part of the payment to transfer of assets, satisfaction of conditions or retention of a particular contract. The essential point is that the payment procedure is stated expressly and the buyer understands when corporate rights and management control are received.

A business purchase or sale can be organised from document preparation through payment and transfer of management. UBC can help the parties define exactly what is being sold, agree the price and prepare the agreement. We will be pleased to answer additional questions and help you complete the transaction successfully.