After researching and negotiating the best deal, the next step is to draft a legally binding contract. This agreement will ensure that both the seller and buyer will follow through with their promises and confirm all terms and conditions of the transaction. This contract will include terms of the sale, what is included in the sale price, and optional clauses and warranties to protect both the seller and purchaser after the transaction has been completed.
Your Agreement Should Include
Business - description of company/assets/stocks
Closing Date - when the purchaser will buy and seller turn over assets
Confidentiality - both parties will not share the details of the contract
Non-competition Clauses - the seller promises not to compete with the business
Non-solicitation - the seller will not hire away current employees
Parties - identifying the Purchaser and Seller
Purchase Price - Payment transfer including any deposits or financing
Representations & Warranties - the buyer and seller will trust each other that all assets, conditions of the sale and other promises are honored
Some other useful details to be included in your Business Purchase Agreement:
Accounts Receivable - details about how outstanding payments will be collected or handled
List of Assets - detailed list of all items that will be included in the sale
Conditions - actions that must be taken before closing date
Disclosure - purchaser can access documentation and records between the agreement period and before closing
Inventory - include all purchases that will be part of the sale
Liabilities - disclosure of debts, if any, that will be transferred from seller to purchaser
Payment Terms - details of the payment amount that will be paid at closing
Termination - confirm the transfer of employees, re-hiring or termination of existing employees
