Obtaining Warrantees and Deeds of Indemnity
Warrantees and deeds of indemnities are common in situations where a ready made company which has previously traded is being sold. Each will detail the specifics of events or situations where they can be invoked and what actions must be taken at that stage.
Payments by Instalment
In some situations where the risk of unknown liabilities is perceived to be significant, the consideration for the company being purchased may be paid for in instalments. For example fifty percent might be paid immediately with the reminder being paid at some specified date in the future.
Depending on how long the future date extends to, this arrangement could provide some measure of security to the purchasers of the ready made company. Should the off-the-shelf company contain undisclosed liabilities or be subject to an action as a result of its past behaviour, the purchaser might have recourse to deduct reasonable amounts from the subsequent instalment.