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Purchase of Business Agreement

2 signers
1 Seller
2 Purchaser
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A business purchase agreement is a contract used to transfer the ownership of a business from a seller to a buyer. This document lays out the terms and conditions of the sale, including the purchase price and any future payments or obligations. Generally, this will also include details of certain assets and liabilities included or excluded in the sale.
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purchase of business agreement template

Businesses purchase agreements are like bills of sale, which document the purchase and operation of business units. Any assets and shares of a business may be transferred.

As a legally binding contract the contract enables securing the right to follow up, ensuring the fulfillment of both the purchaser and seller’s promises. Business purchasing agreements contain basic aspects including negotiation and preparing the terms of the sale.

Our purchase of business agreement can be customized to fit your specific needs and can cover all aspects of the transaction. Such agreements can act as an official document of sale or purchase and serve to prove ownership to the buyer.

A poorly written agreement can cause unwelcome legal consequences to both sides if they fail to meet their stated purposes, so signatories are expected to define the contents of the purchase of business agreement.

Everything You Should Know About Purchase of Business Agreements

You need to know how to make good business purchase agreements to protect your interests before you decide on selling or buying. Make sure you have evaluated the pros and cons of starting from scratch versus using existing agreements like our free template. Formalise the sale or purchase process with a legally binding document to avoid any misunderstandings or disputes in the future.

To ensure all assumed liabilities and assets are properly transferred, both parties should provide a thorough due diligence of the business assets involved. This includes verifying financial statements, contracts, licenses, and employee relations.

The purchase price should also be carefully negotiated and considered, as it can include a combination of cash, notes, and other valuable assets. Additionally, the payment schedule and any future obligations for the buyer should be clearly outlined in the agreement.

The purchase of business’s assets should also specify terms such as non-compete clauses or the prevention of release proprietary or confidential information to protect both parties’ interests post-transaction.

What to Include in a Purchase of Business Agreement

By using our free business purchase agreement template, you can protect your transaction by having a clear and thorough agreement in place. Here are some key features to consider:

  • Clearly define assets being sold or purchased, including liabilities
  • Detail the purchase price and any future payments or obligations
  • Outline what follows after the closing date of the sale, such as the execution of a bill of sale by the seller
  • Specify terms of sale such as special conditions or payment methods, i.e., installment or lump sum payment

Remember to have both parties fully review and understand the purchase of business agreement before proceeding with the transaction. If needed, don’t hesitate to seek legal counsel for guidance in creating a successful and secure purchase of business contract.

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Business information

Type the operating name in case it is distinct from the business name. Give an overview of business operations of the company, i.e., retail automobile retail sales.

Output format

State if the agreement will have priority over those of any previous letters or verbal agreements signed by the parties involved in the transaction.

Parties to the contract

Include full legal names and addresses of both parties involved in the transaction: seller and buyer. Don’t forget to include business entity names and addresses, if applicable.

Purchase and sale

Specify the assets being purchased in the agreement, such as inventory, accounts receivable, equipment, real property, etc. Indicate and include excluded assets in the transaction.

FAQ About Purchase of Business Agreements

Without a purchase agreement, there may be confusion or misunderstandings about the terms of the transaction for both the seller and the purchaser. It also helps explain the company and its current situation and informs buyers about purchasing existing business assets.
You can create your own agreement or use a template. It’s also important to include payment details, terms and conditions, and specify the parties involved in the transaction. Seeking legal counsel is also recommended for professional guidance.
Yes, the buyer can withdraw before completing the transaction. So long as the purchaser does so, the buyer is legally free to renege from the arrangement.

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