An acquisition agreement where the sellers are selling their stock, membership interests/units, partnership interests, or similar, rather than the assets of the company. An Equity Purchase Agreement may also be called a Membership Interest Purchase Agreement or a Stock Purchase […]
Equity Consideration is when the sellers in an acquisition transaction receive all or part of their purchase price payment in equity (stock, membership interests, partnership interests, or similar) of another company, which is usually the buyer or the buyer parent […]
Equity broadly refers to the ownership of a company, which can be represented by stock or other units of ownership. When an investor has ownership of a company, he or she has equity in the company.
An Encumbrance is a claim made against a property by someone other than the current titleholder of the property. Examples of encumbrances include leases, liens, easements, mortgages, deeds of trust, or similar devices.
An Employer Identification Number (EIN) is the number issued by the IRS to a company that identifies the company as a taxpayer in the US. An EIN is required for a company to open up a bank account and file […]
An Employee is, in most states in the United States of America, an individual who works for a company where the company controls the manner, means, equipment, and timing of the performance of the work. Most employees receive payment for […]
An Earnout is a portion of a sale agreement whereby the sellers receive certain payments contingent on future events, typically revenue or profit milestones.
EBITDA is essentially net income with interest, taxes, depreciation, and amortization added back to it.
Earnings Before Interest and Taxes (EBIT) is an operating profit metric. The EBIT is determined by excluding interest and taxes from expenses and then subtracting those expenses from revenues. Companies’ values are often projected as multiples of EBIT.
An Executive Summary is a short summary document, normally one to three pages, that describes material facts and strategies of a company.