The clause that binds you before the price is agreed

"The seller undertakes not to solicit, negotiate with or provide information to any third party for a period of ninety days." That line sits in the middle of a letter of intent that everyone in the room keeps calling non-binding. It is binding, it is often the only part of the document that is, and it hands one buyer three months of quiet in which nobody else can bid. Transaction structuring begins at that point, not at the share purchase agreement. The order in which you sign things, and what each signature closes off, decides more than most of the clauses you will argue about later.

What follows is the working set of M&A documents on a Belgian share deal and the transaction documents on a fundraising round, taken apart one piece at a time: what each one does to you, and the moment it stops being a draft.

Share deal or asset deal: the first transaction structuring choice

The first structuring decision comes before any drafting. In a share deal the buyer acquires the shares and inherits the company as it stands, with its contracts, its staff and its history. In an asset deal the buyer picks the assets and contracts it wants and leaves the rest behind. Everything downstream in the documentation follows from that single choice.

A share transfer in a Belgian SRL is remarkably light on formalities. No notary is involved. Under article 5:61 of the Belgian Companies and Associations Code the transfer is enforceable against the company and third parties through a transfer declaration entered in the share register, dated and signed by seller and buyer. What does need checking early is article 5:63, the default consent regime: unless the articles of association say otherwise, a transfer to an outside party needs the written approval of at least half the shareholders holding three quarters of the shares, excluding the shares being transferred. Read the articles in the first week of transaction preparation, because a minority shareholder with a veto discovered at closing is a renegotiation.

An asset deal is the opposite. Each category of asset moves under its own rules, real estate requires a notarial deed, and the employees attached to the transferred activity move automatically with their existing terms under collective bargaining agreement 32bis of 7 June 1985. Then there is the tax file. Under article 442bis of the Income Tax Code, the transfer of a business as a going concern is not enforceable against the tax authorities until the end of the month following notification of a certified copy of the deed to the receiver, and in the meantime the buyer is jointly liable for the seller's tax debts up to the amount already paid. The way out is a set of certificates confirming there is nothing outstanding, requested in the thirty days before that notification, with the equivalent for social security contributions. Buyers who skip this find out when a demand for the seller's arrears lands on their desk.

The share deal set, piece by piece

The non-disclosure agreement comes first and does more work than its length suggests. It is the only protection you have while a competitor reads your customer list, and the clause that matters is not the confidentiality undertaking but the non-solicitation of staff and customers, with a duration that survives a failed process.

Then the letter of intent, or heads of terms. It fixes price, structure, the perimeter of what is being sold and the timetable, and it is mostly not enforceable. Exclusivity, confidentiality and cost allocation are. This is the point of maximum leverage for a seller and the point where sellers most often give it away, which is why a well-drafted LOI matters more than its non-binding label suggests. Whatever you concede here, you rarely win back once due diligence has started.

The share purchase agreement is the centre of the file. It carries the price mechanism, whether locked box or completion accounts, the conditions to be satisfied before closing, the warranties, the limitations on those warranties, and the specific indemnities for risks diligence has already found. It is long because every one of those elements is a negotiation about who carries which uncertainty.

The disclosure letter is the document sellers underestimate. Warranties in the SPA are drafted as absolutes. The disclosure letter is where the seller qualifies them, item by item, and every properly disclosed exception is a claim the buyer cannot bring. It is the real boundary of your liability, and it is usually written under time pressure in the last week, which is exactly the wrong time. Its practical value also depends on whether there is anything left to claim against, a point covered in our piece on warranties given without solvency behind them.

Around the SPA sit the security arrangements. An escrow agreement parks part of the price with a third party for a defined period and defines who can call on it and on what proof. A warranty and indemnity policy shifts the same exposure to an insurer instead, which changes the negotiation: the buyer stops pushing for a large retention and the seller accepts a broader warranty catalogue because an insurer, not the seller, will pay.

Finally the closing file, which is where deals slip. A closing memorandum records that every condition has been met and that title and risk have passed. The share register is signed. Powers of attorney cover the signatories who cannot be in the room. A shareholders' meeting on the same day accepts the resignation of the outgoing directors, grants them discharge and appoints the buyer's nominees. Bank confirmations, loan releases and key contract consents all have to be in the folder before the money moves. The gap between the two dates is a project in itself, which we set out in detail on what actually happens between signing and closing.

Fundraising structuring: the same logic, with a notary in the middle

A round has fewer documents than a sale and they bind in a different order. The term sheet sets the valuation, the instrument, the liquidation preference, the board composition and the reserved matters. It is short and it is where the cap table is really decided, so anyone treating it as a formality on the way to the long form is negotiating the wrong document. Our guide to the clauses that matter in a Belgian term sheet goes through them one by one.

The subscription agreement commits the money against conditions and repeats a lighter set of warranties from the company and, often, from the founders personally. The shareholders' agreement governs everything after the wire: transfer restrictions, information rights, anti-dilution, drag and tag, and the founder commitments that decide what happens if someone leaves, which we cover in vesting and leaver clauses in Belgian rounds.

Then the legal structuring of the transaction meets Belgian company law. New shares in an SRL are issued by the general meeting under a reinforced majority, and the issue together with the resulting amendment of the articles is recorded in a notarial deed. If part of the round comes in as something other than cash, a receivable converted into equity, intellectual property, a business contributed in exchange for shares, the Code brings in a report from a registered auditor (réviseur d'entreprises) on what is being contributed alongside a report from the management body. That is weeks of lead time, not days, and it is the item most often missed when a round is scheduled around an investor's committee date.

• The term sheet decides valuation, instrument, control and the effect on the cap table, and it binds you on exclusivity and confidentiality from signature while everything else in it is intent only.
• The subscription agreement decides the amount, the tranches, the conditions and the warranties, and it binds on signature, subject to those conditions being met.
• The notarial deed of issue decides that the new shares exist, and it takes effect when it is executed before the notary and becomes effective against third parties once it is published.
• The shareholders' agreement decides governance, exits and founder commitments, binds on signature, and outlasts the round.

One point on public offers, because founders raising from a wide circle ask about it. Above EUR 12 million raised over twelve months, the threshold in force since 5 June 2026, the offer needs a prospectus approved by the FSMA. Between that ceiling and a floor of EUR 500,000 over the same twelve months, an information note filed with the FSMA is enough. Below the floor neither document is required, provided no single investor can commit more than EUR 5,000 to the offer. A round placed privately with a handful of professional investors is a different exercise, but a friends and family raise marketed to an open list is not.

Where the leverage sits in the sequence

Read the whole set as one sequence rather than a pile of deal docs, and the leverage points become obvious. Three deserve naming.

• Everything conceded in the letter of intent is priced in before diligence starts, so the hours spent there are worth more than the same hours spent redlining the SPA.
• Conditions precedent set the calendar, and merger control is the one you cannot compress: where combined turnover in Belgium exceeds EUR 100 million and at least two of the parties each have EUR 40 million of Belgian turnover, the transaction has to be notified to the Belgian Competition Authority under article IV.7 of the Code of Economic Law and cannot be completed before clearance.
• Information obligations towards a works council on the seller side have their own timing, and a leak before that meeting damages trust with the people the buyer needs to keep.

The cost of getting the sequence wrong is rarely a lost deal. It is a worse deal. Exclusivity granted too early removes the alternative that made the price credible. A disclosure letter written in the final week leaves gaps that turn into a claim eighteen months later. A capital increase discovered to need an auditor's report two days before the notary's appointment pushes a round into the next quarter, and cash runway does not wait. None of this shows up in the headline valuation, which is why it is so easy to underestimate during transaction preparation.

The dups approach

A document set is where our two disciplines have to meet. Whoever negotiates the price mechanism is the same person who then has to defend the numbers underneath it, and the conditions precedent are drafted by whoever read the diligence findings rather than by someone working from a precedent file. On a Full Deal Execution mandate we design the whole set as one architecture from the first term sheet or letter of intent, and the closing checklist is written in week one instead of being assembled in the last fortnight.

Owners and founders who already have counsel come to us for Specialist Support on the parts where drafting and money meet: the price mechanism and the equity bridge behind it, warranty limitations sized to what diligence found rather than to a precedent, the fundraising terms that follow from a cap table, and the closing sequence itself.

The moment to read a letter of intent or a term sheet properly is while the exclusivity clause is still a draft. Send us the document you have been asked to sign, and we will tell you which of its lines will still be binding you in ninety days: start there.

Questions we get asked

Which documents do I need to sell my company in Belgium?

On a share deal the working set is a non-disclosure agreement, a letter of intent, the share purchase agreement, a disclosure letter, an escrow or warranty and indemnity arrangement, and a closing file with the closing memorandum, share register entry, powers of attorney and director resignations. An asset deal adds a notarial deed for real estate and the tax and social security certificates.

What does transaction structuring mean in practice?

It means deciding what is sold, how the price is paid and secured, which conditions must be satisfied before completion, and in what order the documents are signed. Those four choices drive the entire M&A documentation set. Structure is agreed in the term sheet or letter of intent, so it is settled long before the long form contract is drafted.

Do I need a notary to sell shares in a Belgian company?

No. Shares in an SRL transfer by private agreement, and the transfer takes effect through a declaration entered in the share register, dated and signed by seller and buyer, under article 5:61 of the Belgian Companies and Associations Code. A notary is needed when the articles of association change, on a capital increase for instance, and when real estate is transferred in an asset deal.

Gauthier Davignon, Manager at dups