What is the Business Sale Agreement we are offering?
We have a business sale agreement available for immediate download. This is a comprehensive agreement for the sale of a business by an individual, a company or any other organisation.
Note: not suitable for sale of shares in a company. For a company sale, see Net Lawman company section.
This document is our most comprehensive version. Before you select it, you might consider the alternative versions, already tailored to the most common business uses. They are listed in the column on your right.
It is usual for the buyer to produce the sale document but there is no reason why the seller should not obtain an advantage by providing the first draft.
Warranties have been used only so far as appropriate to the subject matter of the sale. The drafting notes contain a thorough explanation of how warranties work.
Complications arise if the purchase money is not paid over to the seller at the same moment as other matters are finalised. This and other Net Lawman documents assume that most matters will be completed when the cash is paid. There are a few inevitable exceptions, particularly when relying on a third party such as a web host or domain name registrar. If it is inevitable that some matters remain to be done later than the date of completion, you should use our drafting service to draw the fine points for you.
The purchase price may be apportioned among the assets to assist in tax planning.
As a buyer, you will probably be buying the property or at least taking over a lease. Many of these agreements include a transfer of a lease and / or an agreement to buy a freehold.
We give you more information about these procedures in the drafting notes that come with each document.
A buy–sell agreement, also known as a buyout agreement, is a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business.
It may be thought of as a sort of premarital agreement between business partners/shareholders or is sometimes called a “business will”. An insured buy–sell agreement, (triggered buyout is funded with life insurance on the participating owner’s lives) is often recommended by business succession specialists and financial planners to ensure the buy–sell arrangement is well-funded and to guarantee there will be money when the buy–sell event is triggered.
Clauses
A buy–sell agreement consists of several legally binding clauses in a business partnership or operating agreement or a separate, freestanding agreement, and controls the following business decisions:
Who can buy a departing partner’s or shareholder’s share of the business (this may include outsiders or be limited to other partners/shareholders);
What events will trigger a buyout, (the most common events that trigger a buyout are: death, disability, retirement, or an owner leaving the company) and;
What price will be paid for a partner’s or shareholder’s interest in the partnership and so on.
Buy-sell agreement can be in the form of a cross-purchase plan or a repurchase (entity or stock-redemption) plan. For greater neutrality and effectiveness of the buy–sell arrangement, the service of a corporate trustee is recommended.