Legal Definitions - closed transaction

A closed transaction refers to a deal or agreement that has been fully completed and finalized. This means all conditions specified in the agreement have been met, all necessary documents have been signed and filed, and all payments, transfers of assets, or other obligations between the parties have been successfully executed. At this point, the transaction is legally binding, irreversible, and the parties' primary duties under the agreement are considered fulfilled.

Here are a few examples to illustrate this concept:

• Real Estate Purchase: Imagine a family buying a new home. The process involves an offer, acceptance, inspections, and securing a mortgage. The transaction becomes a closed transaction on the "closing date" when all parties (buyers, sellers, lenders, and attorneys) meet. At this meeting, the final documents, such as the deed and mortgage papers, are signed, the purchase funds are transferred from the buyer's lender to the seller, and the keys to the property are handed over. Once these steps are completed, the ownership has officially transferred, and the deal is final.

• Business Acquisition: Consider a large technology company acquiring a smaller software startup. Before the acquisition is complete, there are often many conditions, such as regulatory approvals, due diligence reviews, and shareholder votes. The acquisition becomes a closed transaction when all these conditions are satisfied, the agreed-upon purchase price (whether cash or stock) is transferred to the startup's owners, and the legal documents formally transferring ownership and control are executed. At this point, the startup is legally part of the larger company, and the deal cannot be undone.

• Secured Loan Agreement: A small business might take out a loan from a bank to purchase new equipment. The loan process involves an application, credit checks, and the bank approving the loan amount and terms. The loan becomes a closed transaction when the loan agreement documents are signed by both the business owner and the bank representative, any required collateral (like the equipment itself) is legally secured, and the funds are disbursed from the bank directly into the business's account. Once the money is transferred, the business has received the loan, and its obligation to repay according to the terms officially begins.