The date of completion has been set by all parties involved in the transaction. Now the hard work kicks in, as you strive to get all the transaction documents negotiated, finalized and fully executed by that date. There’s a lot of money and reputation at stake in making sure you hit the deadline, so you need to be on your A-game in terms of productivity and delivery.
Over the course of the closing, you can expect to be exhausted, hungry and frustrated. Other than lots of coffee and energy food (I recommend bananas, brazil nuts, and avocados), staying organized is the most important thing you can do.
So, here are a few things you can expect and plan for to get you over the line.
The closing may be ‘remote’ or a ‘virtual’ closing, where the parties are not able to gather together in the same room to execute documents. This means the exchange of signed agreements will happen by email, and completion will be confirmed by conference call.
What you can expect in this instance is a lot of emails and files flying backward and forward between the transaction parties. There can be literally hundreds of comments and amendments being returned as versions of documents pass between parties, changes are compared, and reviews take place. It’s hard to stay on top of this and a lot of time will be invested in keeping track of the latest version and all the amendments. When you’re working with multiple law firms over different time zones, keeping track can be a particular challenge.
It’s essential to be organized and to operate an efficient status and version tracking system, so there is less likelihood of the team missing something. All but the smallest deals will run some form of documents checklist, which you'll work hard to keep updated throughout the closing. This is where using a specialist online checklist solution or transaction management tool, such as our solution Workshare Transact, can be beneficial, as it helps you track status and organize transaction files around that checklist for the benefit of the entire working group.
Less frequent now are ‘physical’ closings, where all signatories are in a meeting room physically signing the pages in front of you.
As people will have invested their time and expense in traveling, it’s important that everything is set up immaculately beforehand and that there aren’t any mistakes during this physical signing. It's not uncommon for corporate teams to have a "dry run" of the closing the day prior to closing itself.
You will need to have reviewed all documents in the checklist with 100% accuracy and be confident everything is perfect for the signing parties. In addition to preparing final forms of agreements for signature, corporate deals may also require you to prepare physical disclosure bundles, requiring you to run through with the other party’s lawyers and check both sides have matching sets of documents.
All the transactional documents for signature - from the share purchase agreement right down to the last companies house forms - need to be laid out for the parties to sign. Corporate closings can easily take up the largest of the firm's meeting rooms. Post-it notes stating ‘SIGN HERE’ help you and the clients know exactly where signatures are needed and can save valuable time. Over a series of hours, every document will be signed, every signature tracked and checked off, and once everything has been double checked (and checked again), the purchase price can finally be transferred to the sellers.
Preparing for post-completion actions
When everyone has signed on the dotted line, whether that’s virtually or physically, you can’t breathe a sigh of relief just yet. Now, you need to prepare the closing binder or bible and circulate copies to everyone.
This is easier where the closing is physical. Where it is virtual, all the relevant versions and signature pages that need to be compiled into your bible or closing binder will be sitting as attachments in your inbox - and there can be hundreds of files to locate before you begin.
Once located, you'll need to create a fully signed and dated copy of each document in the checklist with complete accuracy before ordering and indexing these final versions for the closing binder itself.
Creating the bible or closing binder can take weeks, if not months, using traditional methods, which can be time-consuming and frustrating when everyone else has moved onto the next project (and you're expected to contribute there too). The client can also get easily frustrated if they have to wait a long time for the closing binder to be delivered.
Fortunately, if your closing has been run through a transaction management, like Workshare Transact, the majority of the work is already done. You can prepare the closing binder quickly and efficiently, get it to your client and get involved straight away in the team's new deals.
In addition to the closing binder, you'll need to ensure you file any Companies House forms, update the statutory books and registers and pay stamp duty or any other relevant international taxes.
About Rav –
Ravinder Barn is a qualified lawyer and trained at Brabners LLP. She worked on a large variety of transactions and is bringing this knowledge to the Customer Success team at Workshare, for Workshare Transact. Workshare Transact is a secure online transaction management platform used by law firms around the world, including Simmons & Simmons and Fieldfisher.
If you have any questions for Ravinder, please email her at Transact@workshare.com