19 COMMERCIAL LAW In practice, it may be possible that the closing conditions are not fulfilled by the obligatory party within the period specified in the agreement. Therefore, it can be set forth under the share subscription agreement that if the closing conditions are not fulfilled by the obligatory party within the period, the other party will be granted the right to waive the fulfillment of the conditions, to postpone the closing, or even to terminate the share subscription agreement, depending on the nature of the conditions. Representations and Warranties One of the most important reasons for an investor to invest in a company is the representations and warranties they receive from the founders.3 The purpose of the representations and warranties given by the founders is to paint a picture of the business being invested in4, and to determine the responsibility of the founders if the company does not comply with this picture. The main representations and warranties given by the founders in the share subscription agreements are as follows: • The company is in compliance with the applicable law and there is no violation of any applicable law, • There is no encumbrance on company shares, • All of the company assets defined in the agreement belong to the company or are leased by the company or the company has the right to use them, • Company financials are kept in accordance with generally accepted accounting principles or international financial reporting standard (IFRS), 3 In practice, although it is seen that the representations and warranties are generally given by the founders, they can also be given by the existing shareholders or the company. 4 Kling Lou R./ Simon, Eilen Nugent/ Goldman, Michael: Summary of Acquisition Agreements, 51 U. Miami L. Rev. 779, 1997, p. 783 (https://repository.law. miami.edu/umlr/vol51/iss3/10) (Access Date: 21.12.2021).
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