In addition to the representation and guarantee clause, the condition is also one of the most important clauses of a business transfer contract, as it includes conditions or events that must be concluded before the contract comes into force. As soon as the conditions are met for the purchaser, the rights and obligations of the parties take effect. This clause ensures that the seller has legitimate rights, authorizations and consent for the transfer of the business. An example of such a clause may be – in re “Rajeev Bansal and Sudershan Mittal” – [2020 (4) TMI 67 – AUTHORITY FOR ADVANCE RULING, UTTARAKHAND] is a partnership company that deals with the construction of residential/commercial complexes. The company was founded for the construction and sale of a residential/commercial building in Manoharpur, Jwalapur, Hardwar. The applicant has received authorization from the competent authority. The area covered was about 1.25 lakhs. A total area of 85 thousand square meters was built up to the time of transmission. Ronav Infrastructure), who worked for the same company, approached the applicant to take over this incomplete project in order to continue the construction and sale of the building in question. The applicant entered into an agreement with Ronav Infrastructure for the sale of the company as a “current business”.
The main advantage of the business is the land, the incomplete housing built in the countryside and the approved map. On 24.10.2019, the transfer of dwellings was the subject of a separate deed of sale for the transfer of apartments, as required by state law for the following 21.80. GST`s applicability to the Business Transfer Agreement is an agreement between and between the seller and the divested company to achieve a break and enter in which each asset and the liability of one or more units are transferred, sold, leased or assigned to another. This type of agreement guarantees ownership of other companies. The buyer is associated with the company`s transfer agreement on the basis of the seller`s insurance and guarantees during negotiations between the parties. Here, the seller promises the buyer the assets and liabilities of the company. A seller admits that he is authorized to sell the business and that he has legal permissions under the law to sell the business. The insurance and guarantees provided by the seller in a transfer contract will be relatively broader than the buyer.