Signing
The execution of the definitive transaction agreements, which may or may not coincide with completion.
Full Definition
Signing (also called "exchange") is the point at which the parties execute the definitive transaction documents, creating binding contractual obligations. Signing may coincide with completion or precede it.
Simultaneous sign and close:
- All conditions satisfied at signing
- Completion happens immediately
- Common for simpler transactions
- Reduces conditionality risk
Split signing and completion:
- Documents signed but completion deferred
- Gap allows satisfaction of conditions
- Common for regulated deals or complex transactions
- Creates period of uncertainty
Documents typically signed:
- Share Purchase Agreement (or APA)
- Disclosure Letter
- Tax Deed
- Side letters and ancillary documents
Pre-signing requirements:
- Board approvals
- Shareholder approvals (if required)
- Signing authority verification
- Final document review and mark-up
- Virtual signing platforms increasingly used
Between signing and completion:
- Conditions precedent must be satisfied
- Parties bound by pre-completion undertakings
- Material adverse change provisions apply
- Termination rights may exist
UK practice: The choice between simultaneous and split exchange/completion depends on the transaction's complexity and regulatory requirements.
Related Terms
Completion
The legal transfer of ownership when all conditions are satisfied and the transaction formally closes.
Conditions Precedent
Specific requirements that must be satisfied before a transaction can complete.
Share Purchase Agreement (SPA)
The definitive legal contract governing the sale and purchase of shares in a company.