Business Sale AgreementA Business Sale Agreement is used to clearly set out all relevant terms of the sale when selling or buying a business.
You MUST seek legal advice to ensure that this agreement conforms with relevant State and Territory legislation as well as your intentions for the transaction. Additionally, inclusion of land in this agreement will incur an additional set of legal requirements, and we recommend seeking advice from a lawyer specialising in conveyancing. A Business Sale Agreement is a legal document used to transfer business assets from the seller (business owner) to the buyer (new owner). It sets out the terms clearly, so both the seller and the buyer can avoid any future disputes in the sale of a business.
You may also know the Business Sale Agreement by one of its other names:
- Business Sale Contract
- Business Purchase Agreement
- Sale of Business Agreement
- Sale of Business Contract
Use this Business Sale Agreement if:
You have negotiated the sale/purchase of a business;
You want to set out the terms and conditions of the sale/purchase;
You are a small to medium sized business and need a concise sale document to limit liabilities.
What does the Business Sale Agreement cover?
Transfer of ownership of assets;
Particular assets to be transferred;
Any conditions precedent;
Relevant warranties; and
Other documents you may need:
What preparation is required before completing a business sale agreement?
Advice from a lawyer should be sought before signing a business sale agreement. This advice will ensure that your company is well informed of the terms of the agreement, as well as the implications it may have on the business’ employees and property.
The parties involved in the agreement should also sort out such things as the stock and existing partners the business has in trade, as well as other day-to-day business needs.
How much should I sell my business for?
When selling your business you should consider the amount of assets it contains, the profits earned each financial year and the potential your business has to grow. You will also have to consider a valuation method and whether or not it is worth seeking professional advice.
What laws apply to a Business Sale Agreement?
- The general principles of contract law are applicable to a business sale agreement.
- A business sale agreement can also involve the transferring of employees between the companies involved. Therefore, employment law may be applicable in instances where employees from one company are transferred to the purchasing company.
- Intellectual property law may also be applicable to this type of agreement. Instances like this can occur when the company being purchases may have a trademarked product that they have exclusive rights to.
Should this agreement be reviewed by a lawyer?
In most cases it is recommended that your business sale agreement be reviewed by a lawyer. There are various elements of a business sale agreement that can vary depending on what type of purchase it is. It is essential you hire a lawyer to analyse the conditions in order to clarify whether there may be legal ramifications if you breach a term that to terminate the agreement or misinterpret a condition of the sale. Hiring a lawyer will ensure that your business is aware of possible legal ramifications in regards to a business sale agreement. A lawyer will also advise you as to the best way to ensure that the agreement is performed, as well as protecting you in case of a termination or breach in the agreement.