Consider This Information When Using a Business Purchase Agreement for the Sale of a Company or Assets
The sale or purchase of a business is a major financial undertaking. This process has many legalities, and a clearly-written contract is a vital part of it. This guide will help you understand how to fill out and sign a business purchase agreement template so that everyone’s best interests are protected.Download Template
Below we’ll cover:
- What a Business Purchase Agreement Template Includes
- Important Clauses
- Mistakes to Avoid
- Additional Resources
- Making It Official
What a Business Purchase Agreement Template Includes
A business purchase agreement is a legal document that states all the terms of a sale of a business. While there are many aspects of this contract, some important parts to consider adding include:
- Business Information – The name, address, type of business, and other details about the business need to be included in the contract. The contract usually has an Exhibit attached that offers a complete description of all of the assets of the business.
- Date – This is the date that the agreement for the sale of the business takes place.
- Parties – The seller and purchaser are both named in the contract along with their mailing addresses.
- Closing – The closing date, which may be different than the agreement date, and the place where the closing occurs are listed here.
- Payment – This is where the purchaser and seller indicate the amount paid for the assets.
- Signature – For the agreement to be binding, it must have a legally binding signature. Nitro Sign makes it simple to send documents and collect secure, legal digital signatures.
Because business sales involve large financial transactions, they must be clear. Having the right clauses in them is vital. These are some you will want to consider adding to your business purchase agreement template:
- Severability Clause – Sometimes a portion of an agreement is deemed invalid or illegal. This clause ensures the rest of the agreement remains enforceable by allowing the problem part to be severed.
- Dispute Resolution Clause – This clause outlines how disputes are resolved relating to the contract.
- Governing Law – Every sales contract is governed under state law. This section states the appropriate state.
- Notice Clause – This clause indicates the mailing address where any notices regarding the agreement must be sent, and it states that all requests or actions must be made in writing.
- Representations and Warranties Clauses – Both the seller and the buyer need to have a clause outlining their representation and warranties. This should detail what they know about the business and its assets, including any titles or claims against it. This clause has a place to fill in additional information that is not already included in the template.
Mistakes to Avoid
When filling out a business purchase agreement, you must take care to ensure everything is clearly stated. Mistakes could lead to hundreds of dollars lost in the transaction.
One of the most important places to spend some time is the description of the business and its assets. Use multiple pages if you need to, but include all assets related to the business. Anything that is not included in this section is not legally part of the sale.
Always get signatures on a business sales agreement with a witness. This transaction is simply too valuable to overlook the witnessing of the signature. With Nitro Sign, getting those signatures, including the signature of the witness, is simple.
Finally, avoid the mistake of onlooking local or state guidelines about your business sales agreement. The structure of the template must follow these regulations in order to be legally binding in your jurisdiction.
For more information about selling your business, visit:
- Legal Advice for Selling a Business
- Selling Your Business: Eight Steps
- 10 Things to Do Before Selling Your Business
Making It Official
Often, business sales agreements are made official at closing, where both parties can be present and sign the document under the watchful eye of a qualified witness. However, when in-person meetings aren’t possible, you still need to collect signatures. Digital signatures collected securely with help from Nitro Sign are a great option. Learn more about using Nitro Sign to make your agreements legally binding.