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The stock of a subsidiary or smaller corporation may be held by a single corporate entity. Where there is one stockholder, the representations and warranties about the seller and the company will be made by that corporate stockholder. Liability tends to be straightforward, although the buyer may require the owners of the corporate seller to stand behind representations, warranties, and indemnification obligations. Escrows are also important, particularly when the selling corporation has no other assets after the transaction closes. Flag key issues when drafting or negotiating your next deal by reviewing the drafting notes to this robust new template.
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