Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred)

This Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred) is designed to replace the purchase price schedule in the relevant business/asset sale agreement.

The default position in those agreements is that the purchase price is paid in cash at completion, without reference to the value of the assets at completion and without a mechanism to adjust the price if the buyer has overestimated value and paid too much initially. This schedule introduces a completion accounts adjustment with an escrow element.

It should only be used where the creditors and debtors are being transferred to the buyer.

What does Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred) do?

It provides a purchase price mechanism that splits payment at completion between an amount paid to the seller(s) and an amount paid into an escrow account, with the final amount adjusted by reference to completion accounts.

What does Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred) cover?

• Two payments at completion: an initial payment to the seller(s) and a second payment into an escrow account.
• A completion accounts calculation by the accountants of the net value (at the transfer time) of the assets sold to the buyer.
• A balancing payment from the escrow account if the initial payment is less than the net value of the assets, with any excess shortfall paid directly by the buyer to the seller(s).
• Return of any remaining escrow funds to the buyer after any shortfall has been paid to the seller(s).
• A clawback mechanism where the buyer has overpaid in the initial payment, enabling recovery from the seller(s).

When should you use Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred)?

Use this schedule where the parties want a purchase price adjustment by reference to completion accounts, including an escrow arrangement, and where the transaction involves the transfer of creditors and debtors to the buyer.

Schedule - Purchase Price Based on Completion Accounts with Escrow (Asset Sales Where Creditors & Debtors Transferred) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.