You might be wondering…

“Is the price of an enterprise determined only by the last financial statement?”
“What if the value of assets changes between signing and delivery?”
“How are newly created debts handled in the meantime?”

My clients often ask…

“I signed a contract to buy an enterprise, but in the meantime the company repaid a large debt. Do I still pay the full price, or is it adjusted?”
“How is the purchase price adjusted if the accounts changed after the balance sheet date?”

What the law says in a nutshell

• § 2176 Civil Code: The purchase price of an enterprise is determined based on the state of the enterprise at the time of contract conclusion, according to accounting records.

• If there is a substantial change between signing and delivery, the buyer has a right to an adjustment – either a reduction or increase of the price.

• The parties may agree on another method of determining the price, but the default rule is accounting evidence.

Practical significance of the rule

• Buyer: protected against paying a price that no longer reflects the real value of the enterprise at delivery.

• Seller: assured that the price is based on objective accounting, not arbitrary.

• Creates room for additional financial settlement if assets or liabilities change.

Common mistakes in practice

• Parties fail to agree on a clear adjustment mechanism – leading to long disputes.

• Buyers overlook that new debts can arise until the moment of delivery.

• Sellers conceal accounting changes that reduce enterprise value.

How to proceed correctly

1. Set a reference accounting period (e.g. the last financial statement).

2. Agree on an adjustment mechanism (e.g. audit as of the delivery date).

3. Include a duty to inform about significant changes between signing and delivery.

4. Ensure the right to inspect accounts during the interim period.

Practical examples

• Buyer paid the price according to accounts but later discovered a new loan had been taken – the court granted him a reduction.

• Seller claimed the enterprise matched the books. Buyer insisted on an audit at delivery – the audit revealed reduced inventory value, and the price was adjusted.

Why relying only on “the last balance sheet” is risky

Accounting reflects the state at a certain date, but a business is a living organism where assets and liabilities shift daily. Without a contractual adjustment mechanism, one side may significantly lose out.

Lawyer’s recommendation

I advise buyers: always negotiate the right to an audit as of the delivery date. I advise sellers: be transparent and provide complete accounting, otherwise you risk lawsuits for price reduction.

FAQ

How is the purchase price of an enterprise determined?
According to the state of the enterprise at contract conclusion, based on accounting records.

What if the enterprise changes between signing and delivery?
The price must be adjusted – upwards or downwards.

Can we agree on another way to set the price?
Yes, contractual freedom allows that.