1 Introduction
1.1 It is generally accepted that the Sellers should have control of all tax computations for completed accounting periods up to and including Completion. There is a degree of pragmatism at work here: it is possible that the tax computations in respect of the Last Accounts will not have been submitted at the time that Heads of Terms are signed for the sale of the shares in the Company. Nonetheless, the Buyer is aware that the Sellers are at liberty to submit these computations in the period up to Completion. Indeed they are likely to accelerate their finalisation and submission if the draft share sale documents include onerous clauses regarding prior approval by the Buyer in respect of unsubmitted computations. 1.2 In fact it is strongly arguable that both parties want to have the computations relating to the Last Accounts and earlier years submitted before Completion if possible: the Sellers do not want unwarranted interference and the Buyer has an understandable desire not to be implicated by signing tax computations in respect of pre-completion periods, when his knowledge of transactions is incomplete.
2 Tax Computations Unsubmitted at Completion
The Covenantors shall deliver all documents relevant to periods ending on or before Completion that are required to be authorised and signed by the Company to the Buyer for authorisation and signing prior to submission. If a time limit applies in relation to the submission of any such document, the Covenantors shall ensure that the Buyer receives the document no later than ten Business Days before the expiry of the time limit.
9.3
The Buyer shall:
9.3.1 subject to clause 9.3.2 below, procure that the Company shall cause any such document delivered to it under clause 9.2 to be so authorised and signed as soon as reasonably practicable by and on behalf of the Company, and submitted to the appropriate Tax Authority as soon as reasonably practicable (and in any event within any relevant time limit provided that the Covenantors have complied with clause 9.2);
9.3.2 be under no obligation to procure the authorisation, signing or submission to a Tax Authority of any document delivered to it under clause 9.2 which it considers in its reasonable opinion to be false or misleading in a material respect, or which would require fraudulent or dishonest conduct on the part of the Buyer or the Company.
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