Signing and Closing: One Day, or Two?

1. Two Important Days

There are two important days in a sale: the day you sign the agreement, and the day you hand over the shares and take the money. Sometimes they are the same day. More often they are months apart.

If nothing has to happen first, you sign in the morning, the money moves that afternoon, and you are done. Your advisors call that simultaneous signing and closing, and where it is available it is the version of a deal you want.

But usually something does have to happen first. A regulator has to say yes. A landlord has to agree. So you sign subject to those things happening, and until they do neither side has to perform. Your advisors call these suspensive conditions, because they suspend the deal until they are met. If they are never met, the sale never happens.

2. Competition Approval — the Heaviest Condition

The heaviest thing that typically has to happen first is competition approval. Certain mergers must be approved before they can be implemented, and closing without approval is not a technicality — it is prohibited and it is penalised. Whether you are caught depends on size, and the sizes changed on 1 May 2026.

On a R40 million sale of a business turning over R30 million you are almost certainly below those numbers, and the problem disappears. Establish that early and stop worrying about it. But check rather than assume, because the test looks at turnover and assets on both sides, not at your price.

Where it does apply, treat the filing as a project rather than a form. It runs to hundreds of pages, and the fee alone is R220,000 for an ordinary merger and R735,000 for a large one. Straightforward matters clear in about three weeks; complex ones take two to four months. Approval also tends to come with strings, because our authorities weigh public interest as well as competition, and a two or three year freeze on retrenchments is routine rather than exceptional. Our competition law guide covers the merger-control process in detail.

3. Exchange Control

Next is exchange control, which bites whenever money or ownership crosses the border — a foreign buyer, an emigrating seller, a price paid from offshore.

Getting your proceeds out of the country afterwards has its own limits and its own paperwork with the revenue service. Raise it at the start: it is rarely a problem when planned and frequently one when discovered.

4. Shareholder Approval & the Minority

Third is shareholder approval. Where the seller is a company selling all or most of what it owns — which is what a business sale is — the Companies Act requires that company’s own shareholders to approve it by special resolution, meaning three-quarters of the votes cast.

Even on a plain share sale by individuals, read your own shareholders agreement: most give the other shareholders first refusal before you may sell to an outsider. If you share ownership, our guide to selling with co-shareholders deals with pre-emptive rights, drag-along and tag-along in full.

5. Consents, the Takeover Panel & Suretyships

Fourth: a named schedule of consents

Fourth are consents. Our chapter on contracts, premises and licences covers why they matter; here they become dated obligations on a timetable — your landlord, your bank, a franchisor, any customer whose contract says ownership of your company cannot change without their agreement.

The right approach is a short, named schedule of the consents you genuinely cannot close without, rather than an open-ended promise to get everything — which hands the buyer a way out. Where a marginal consent fails, the usual answer is that the deal closes anyway and you cover the consequences.

Fifth: the Takeover Regulation Panel

Fifth is a certificate from the Takeover Regulation Panel, which catches founders by surprise. Most people think the Panel is only for listed companies. It is not.

The forgotten item: your personal suretyships

One more item belongs on the list even though nobody calls it a condition: the release of the personal suretyships you signed for the company’s overdraft and leases. Your bank will not release you just because the shares changed hands. Start that early.

6. The Long Stop Date

Every conditional deal has a date by which everything must be done. That is the long stop date. Miss it and the agreement falls away. Nobody is in breach, nobody pays damages, and everyone goes home having spent a lot of money on nothing.

So the date has to be honest. If the competition filing realistically takes four months, a three-month long stop is a fiction that will be extended later — and extensions are negotiated, which gives the buyer a fresh chance to talk about price. Set it long enough that a normal process fits inside it, then work quickly anyway. How the long stop fits into the overall deal calendar is mapped in our sale process and timeline guide.

And do not quietly frustrate a condition you have gone off: if you deliberately prevent something you were meant to be pursuing, the law can treat it as though it had happened.

7. Life in the Gap

This is the part founders find hardest. Between signing and closing you still own the business and still carry every risk in it. But you have promised to run it normally and to get the buyer’s agreement before doing anything significant.

“Anything significant” is a defined list, and it is longer than you expect:

For someone who has made those calls alone for eighteen years, asking permission to replace a delivery vehicle is a genuine adjustment. What makes it workable is machinery: a named person at the buyer to ask, a rule that they cannot unreasonably refuse, a short deadline after which silence counts as agreement — three to five business days is common — and a carve-out for emergencies. Get that right and the gap is an irritation. Get it wrong and you spend four months waiting on a committee that meets fortnightly.

There is a legal limit on how far this goes, and it protects you. Until competition approval comes through, the buyer may not actually control your business: they can veto things that would damage what they are buying, but they cannot direct your pricing, your customers or your expansion. And if the buyer is a competitor, you must not hand over live pricing and customer data in this period.

8. The Buyer’s Escape Hatch — the MAC Clause

Most conditional deals give the buyer a right to walk away if something serious goes wrong before closing. Your advisors call it a material adverse change clause, or just a MAC.

It is not a right to cancel because trading softened, or a competitor launched a product, or the buyer’s own bank got nervous. These clauses are drafted narrowly and deliberately so.

Two honest observations. They very rarely succeed, and no South African court has ever ruled on one. Where you do have one, the better version for both sides is a measurable trigger rather than a mood — a stated fall in profit or revenue over a stated period. Then, if the buyer wants out, there is a number to look at instead of an argument to have. If the buyer’s protection concerns run deeper than closing risk, they belong in the warranties and indemnities, not the MAC.

9. If Nothing Actually Stands in the Way

Then do not invent conditions. A simultaneous deal has no long stop date, no conduct restrictions, no MAC and no months of shared limbo. You sign, you close, you are out.