This document is an optional condition which can be used in a business sale agreement.
The Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) empowers the Federal Treasurer of Australia to examine proposals by foreign persons, including companies, to acquire or increase a substantial shareholding in, or acquire a controlling interest in the assets of, an Australian corporation valued above a relevant threshold.
Therefore, when the Purchaser of a business is a foreign person, it is important to consider whether the FATA applies to the transaction and if so, to comply with the terms of the FATA.
Where the FATA applies, it is important to include provisions in the business sale agreement relating to compliance with the FATA.
Using this precedent
This precedent clause is a condition precedent which can be used in a sale of business agreement. It can also be inserted into the conditions precedent schedule of the separate precedents “Business sale agreement – sale of assets (short form)” and “Business sale agreement – sale of shares (short form)”.
When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.
This document has been authored for Lexis Nexis by Jeremy Kriewaldt, Partner, Atanaskovic Hartnell and Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editor Murray Landis, Partner, K&L Gates.