Corporate and M&A

By: Kevin Byrne
Clarkslegal LLP (Reading, England)

On a sale by the sellers of the shares in a company or the assets in a business, often the price agreed is a mixture of an upfront payment payable on completion and a sum of money

depending on how the business performs over an agreed period after completion.  This latter sum of money is referred to as the earn-out. In respect of early stage companies, the earn-out sum can be greater than the initial payment on completion reflecting how the business will grow and become more profitable. Click here to read entire article.