The memorandum of understanding is a crucial document that serves as the “deed of sale” for the transfer of an SME.
There is no specific form required by law for this document, which makes it much easier to sell a company compared to selling a house or car. Every day, shares change ownership on the stock exchange without any formality.
However, due to the risks associated with transferring SMEs, it is essential to have an experienced advisor draft a precise memorandum of understanding.
In practice, the length of the memorandum of understanding may vary from a few pages for a simple sale of a company to over 300 pages for the sale of a major company in an international context.
The memorandum of understanding must include the following information:
- The name of the previous transferor, date and nature of their deed of acquisition, acquisition price for tangible and intangible elements
- The sale price, amount, and terms
- A statement of liens and pledges attached to the business
- Turnover achieved during the last 3 years or since the acquisition (if less than 3 years)
- Net results of the last 3 financial years
- Lease with date, duration, name, and address of the lessor.
Above all, it must mention all the liability guarantees inherent to the sale of the company.
Numerous documents are attached to formalize the delivery of documents, such as contracts, property deeds, AGM, statutes, board of directors, corporate accounts, etc.
