Signing and closing: what happens between signing the contract and completing the sale

Are signing and closing the same thing?

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No. Signing is the execution of the sale and purchase agreement (SPA), the moment when the parties legally commit to the negotiated terms. Closing is the completion of the transaction, when the agreed conditions are met, ownership is effectively transferred and the agreed payment is made. In some transactions, signing and closing happen on the same day; in many others, there is an interval between the two, which can last from weeks to months. Understanding this difference helps the seller know exactly where they are in the process and what is still missing before getting paid.

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Why is there an interval between signing and completing?

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Because, in a large share of transactions, the deal cannot be completed at the moment of signing: there are steps that need to be taken first. Regulatory approvals, such as that of the antitrust authority when applicable, corporate authorizations, third-party consents (banks, partners, contracts with a change-of-control clause) and the fulfillment of commitments assumed in the contract are examples. While these steps are underway, the deal is signed but not yet completed.

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What are closing conditions?

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These are the conditions that need to be satisfied between signing and closing for the transaction to be completed. They may include obtaining approvals, the absence of a material adverse change (MAC), the maintenance of certain characteristics of the business and the fulfillment of specific obligations by the seller or the buyer. If an essential condition is not met within the deadline, closing can be postponed or, in extreme cases, the transaction may not go through. That is why negotiating what these conditions are, and how demanding they are, is part of protecting the seller.

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What can change the price between signing and closing?

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In many transactions, the price agreed at signing goes through adjustments up to closing, to reflect the company's actual financial situation on the completion date. The most common mechanisms involve variations in net debt and working capital between the two dates: if the company generated or consumed cash, if its debt changed, the final amount is adjusted. There are different ways to structure this, and the choice of mechanism, and of the calculation rules, has a direct impact on what the seller receives. It is a technical point where advisory makes a difference.

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What does the seller need to take care of during this period?

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Between signing and completing, the seller normally commits to running the company in the ordinary course of business, without out-of-pattern decisions that could change the value or trigger clauses of the contract. Maintaining results, fulfilling the commitments assumed and avoiding creating facts that compromise the agreed conditions is essential. It is also a period that calls for operational continuity: letting the business lose momentum while waiting for closing can weaken the seller's position or even affect the final price.

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How long does the interval between signing and closing last?

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It depends above all on the approvals required and the complexity of the operation. Transactions that require review by regulatory bodies or many third-party consents tend to take longer; simpler operations can be completed in a few weeks. Having clarity, from the start, about which approvals will be needed and how long they usually take helps to plan the process and to avoid surprises in the final stretch.

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How igc conducts the deal through to closing

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igc conducts each transaction with the seller's exclusive mandate through to actual completion, not just through to signing. This includes anticipating the closing conditions, monitoring the required approvals, negotiating the price-adjustment mechanisms in favor of the seller and guiding the entrepreneur on how to run the company in the interval between signing and closing.

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This follow-through, from the first contact to closing, is led by the partners, an owner-to-owner process, together with the lawyers responsible for the legal side. With more than 500 deals, the firm knows the points that tend to arise in this interval and works to ensure the transaction reaches the end on the agreed terms. There are 34 partners, with offices in São Paulo and Miami.

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Frequently asked questions

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What is the difference between signing and closing?

Signing is the execution of the contract, when the parties commit to the terms. Closing is the completion, when the conditions are met, ownership is transferred and payment is made. They can occur on the same day or with an interval between them.

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Do I receive payment at signing or at closing?

Generally at closing, when the transaction is effectively completed. Between signing and closing, the agreed conditions are fulfilled, such as approvals and consents, needed for the agreed payment to be made.

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Can the price change after the contract is signed?

There can be adjustments up to closing, usually linked to variations in net debt and working capital between the dates. The mechanism and the calculation rules are negotiated and affect the final amount the seller receives.

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What happens if a condition is not met?

It depends on the contract. Closing can be postponed until the condition is satisfied or, if it is an essential condition and not met within the deadline, the transaction may not go through. That is why negotiating these conditions is important.