Business Purchase Agreement Template

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A business purchase agreement is a meticulously prepared legal document that outlines the terms and conditions for the purchase and sale of a business. It's a crucial step in the process of acquiring or selling a company. Answer simple questions to your business purchase agreement template on Loio and get a customized legal document, ready for sharing and submission.
BUSINESS PURCHASE AGREEMENT

This Business Purchase Agreement (the "Agreement") is entered into on   (the "Effective Date") by and between

 , an individual having their usual place of living at   (the "Seller"), and

 , an individual having their usual place of living at   (the "Purchaser"), collectively referred to as the "Parties" and individually as the "Party". 

WHEREAS the Seller owns 100% of the authorized capital at   (the "Company") and desires to sell the Company to the Purchaser at the agreed price, subject to the terms and conditions set forth below;

NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, and upon other valuable considerations, the receipt and sufficiency of which is hereby acknowledged, the Parties have agreed as follows:

SUBJECT OF THE AGREEMENT. According to the terms and conditions of this Agreement, the Seller agrees to sell and convey to the Purchaser the title to the business described herein, including tangible and intangible assets as specified in the Assets and Liabilities clause.

Company name:  

Type of entity:  

Principal place of business:  

 

The Seller shall grant the Purchaser access to complete information regarding the Company, including its current financial condition and the associated risks. The Purchaser shall utilize such access to get necessary information about the Company.

PAYMENT TERMS AND PROCEDURE. The total purchase price for the Company is   (the "Purchase Price").  

The Purchase Price is divided among:  .

The Purchaser shall provide a down payment of   within   days after the Effective Date. The remaining Purchase Price balance shall be paid according to the terms outlined in this Agreement.

The Purchase Price shall be paid in full on   (the "Due Date").

Late payment. If the Purchaser fails to make any payment by the Due Date, the Seller shall have the right to charge interest on the overdue amount at a rate of  % per day.

All payments will be made by cash.

CLOSING PROCEDURE. Upon receipt of the Purchase Price, the Seller shall transfer a title of the Company free from any liens and encumbrances to the Purchaser. This process may include preparing and signing a valid and enforceable document transferring the Company to the Purchaser under the requirements of applicable laws and regulations, timely registration of the deed with the relevant government agency, and receiving a copy of the registered deed as proof of the transfer title (the "Closing").

The Closing shall occur on or before   (the "Closing Date") at a mutually agreed upon title company. The Purchaser and the Seller shall cooperate and provide any necessary documentation or information requested by the title company to facilitate the Closing. 

The issuance and transfer of the Company shall be subject to compliance by the Seller and the Purchaser with all applicable federal and state securities laws requirements. The Company transfer must comply with securities laws and regulations, such as registration requirements or exemptions. These compliance obligations may impose restrictions or regulations on the transferability of the Company.

The Parties shall exchange any ancillary documents related to the transaction, including any necessary consents, assignments, or releases. The Parties agree to execute all required documents to conclude the Closing, including, if applicable, assignments of leases, contracts, licenses, operating agreements, or other documents necessary to fulfill the Parties' intent.

TAXES AND COSTS. The Seller is obligated to prepare and timely file federal, state, and local tax returns and reports with the authorized tax authorities in accordance with applicable laws to ensure the timely payment of all taxes.

Unless otherwise specified in the Agreement, each Party shall pay respective costs and expenses related to the negotiation, preparation, execution, and implementation of this Agreement.

The allocation of closing costs shall be as follows:

  • The Purchaser shall be responsible for the following closing costs:  .
  • The Seller shall be responsible for the following closing costs:  .

ASSETS AND LIABILITIES. The Seller hereby agrees to transfer, and the Purchaser agrees to acquire the following assets and liabilities of the Company:

Assets

  • Tangible assets:  . The Seller warrants that upon delivering physical possession of the Company to the Purchaser, all equipment shall be in "as-is" condition, and the premises of the Company shall pass all inspections necessary to carry out the business.
  • Intangible assets:  . 
  • Accounts receivable:  . 

SELLER'S WARRANTIES AND REPRESENTATIONS. The Seller represents and warrants that:

  • The Seller is the lawful owner of the Company, with full power and authority to sell, transfer, and deliver the Company to the Purchaser;
  • The Seller has not entered into any agreements, contracts, or commitments that would restrict or impair the Seller's ability to sell the Company to the Purchaser;
  • The Seller has prepared and timely filed federal, state, and local tax returns and reports with the authorized tax authorities under applicable laws connected to the Company and ensured the timely payment of all taxes;
  • All information provided regarding the Company, including financial statements, is true, accurate, and complete;
  • The Company will not be offered, sold, or transferred without registration or exemption under applicable securities laws;
  • The title of the Company is free from liens and encumbrances.

PURCHASER'S WARRANTIES AND REPRESENTATIONS. The Purchaser represents and warrants that:

  • The Purchaser has the full authority to enter into this Agreement and to consummate the transaction contemplated herein;
  • The Purchaser has carried out the investigation of the Company, relying on the Purchaser's judgment and the advice of the Purchaser's professional advisors in deciding to purchase the Company;
  • The Purchaser is in a financial position to acquire and hold the Company and can bear the economic risk and withstand a complete loss of the Purchaser's investment in the Company;
  • The Purchaser understands the risks associated with the ownership of the Company and acknowledges that the Seller has provided no guarantees or assurances regarding the Company's future performance.

DEFAULT. Either Party shall be deemed to be in default under this Agreement upon the occurrence of any of the following events:

Upon the occurrence of any event of default, the non-defaulting Party shall have the right, in addition to any other rights established in this Agreement or at law or in equity, to terminate this Agreement by giving written notice to the defaulting Party. The non-defaulting Party shall be entitled to recover all damages incurred due to such default.

TERM AND TERMINATION. This Agreement shall commence on the Effective Date and shall continue until the Closing Date but not before the Parties fulfill their obligations under the Agreement unless terminated earlier under the terms of this Agreement. 

Either Party may terminate this Agreement upon written notice to the other Party if the other Party becomes insolvent or files for bankruptcy.

This Agreement may be terminated in case of liquidation, dissolution, or winding up of the Seller that results in the transfer or acquisition of at least a majority of the Company's voting power.

This Agreement shall terminate in case of a valid transfer of the Company to the Purchaser in accordance and full compliance with this Agreement. This Agreement shall not prejudice any rights the other Party may have before termination.

OTHER TERMS.  .

FORCE MAJEURE. Neither Party shall be liable for any failure to perform or delay in performing the obligations under this Agreement if such failure or delay is caused by events of force majeure, including but not limited to acts of God, war, terrorism, strikes, lockouts, labor disputes, pandemics, epidemics, governmental regulations, or any other similar causes beyond the reasonable control of the affected Party.

In the case of force majeure, the affected Party shall immediately notify the other Party in writing and provide reasonable proof of the cause of the delay or inability to perform the obligations. The Party affected by force majeure shall endeavor to mitigate the consequences of such circumstances and resume the performance of obligations as soon as possible after the circumstances cease to exist.

If the force majeure circumstances last more than   days, either Party may terminate this Agreement by giving written notice to the other Party. In this case, neither Party shall be liable to the other Party for any damages arising from the termination of this Agreement.

CONFIDENTIALITY. The Parties agree to keep all information disclosed during this Agreement confidential and not to share such information with any third party unless required by law or any governmental or regulatory body. To fulfill the Parties' obligations under this Agreement, the Parties agree not to use the confidential information for any purpose unrelated to this Agreement.

This confidentiality clause shall remain in effect after the termination or expiration of this Agreement.

NOTICE. Any notice or communication required or permitted under this Agreement shall be sufficiently given if delivered personally or by certified mail, return receipt requested, to the address outlined in the opening paragraph or to such other address as one Party may have furnished to the other Party in writing, or emails set forth below:

If to the Purchaser:  

If to the Seller:  

GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be governed by and interpreted under the laws of the State of  , and any disputes resulting from or related to this Agreement shall be exclusively resolved by the courts of the State of  .

SEVERABILITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

ENTIRE AGREEMENT. This Agreement constitutes the entire understanding between the Parties and supersedes any prior oral or written agreements.

WAIVER. The failure of any Party to enforce a particular provision of this Agreement shall not constitute a waiver of their right to enforce that provision in the future.

AMENDMENTS. This Agreement may be amended or modified only by a written agreement signed by both Parties and certified, if necessary, according to the federal, state, and local law requirements.

BINDING EFFECT. This Agreement shall be binding upon the Parties and their respective successors and assigns according to the federal, state, and local law requirements.

ASSIGNMENT. Neither Party may assign this Agreement or any of its rights or obligations hereunder without obtaining prior written consent from the other Party, which consent shall not be unreasonably withheld.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

THE PURCHASER

THE SELLER

 ,

 , USA

 

 

______________________

(Place for signature)

 

 

 ,

 , USA 

 

 

______________________

(Place for signature)

 

  

Written by Karyna Pukaniuk - Reviewed by Jonathan McGill

Template Description

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Paper titled "Business Purchase Agreement"; two mean talking outside a cafe

A business purchase agreement is a meticulously prepared legal document that outlines the terms and conditions for the purchase and sale of a business. It's a crucial step in the process of acquiring or selling a company. This agreement's significant purpose is to protect the individual interests of the parties involved by providing a detailed record of what was agreed upon. It provides certainty and clarity to the transaction, reducing the risk of misunderstandings and disputes later on. 

When To Use a Business Purchase Agreement?

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A purchase agreement for business should be employed anytime a business is being sold or bought, irrespective of its size or type. It ensures the transfer process is legally sound, defends each party's best interests, and creates a clear path for resolving potential disputes. The use of a business purchase agreement template could help streamline the process and ensure all essential aspects are covered.

Parties of the Business Purchase Agreement

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  • Seller –– This refers to the individual or entity that owns the commercial establishment initially. The seller's central duty is to transfer the business, including its rights, title, and interests, to the buyer according to the terms laid out in the business purchase agreement. Once the entire agreed amount has been paid, the seller usually endorses a bill of sale document. The document is proof that the seller has relinquished full ownership of the business to the buyer.

  • Buyer –– This constitutes the individual, partnership, or corporate body planning to acquire the business from the seller. In a company purchase agreement, the buyer is accountable for fulfilling the terms of the agreement, including making the necessary payments as agreed upon.
Insight

Once the seller confirms that all conditions have been met and the agreed amount has been paid in full, the buyer receives a bill of sale. This is the legal document, often accompanied by a letter confirming the business's purchase, signifying the buyer's entitled ownership of the business. These verified documents are then typically registered with the appropriate administrative bodies or regulatory entities for record-keeping and legitimacy.

Key Terms

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  • Purchase Price: This signifies the total amount the buyer agrees to pay for acquiring the business.
  • Assets: These are all the belongings of the business. It could include both tangible (e.g., machinery, buildings) and intangible assets (e.g., patents).
  • Liabilities: It refers to the legal obligations or debts the business is responsible for.
  • Confidentiality: This binds both parties not to disclose the business's sensitive information.
  • Jurisdiction: This defines the selected country's state laws that will govern the purchase agreement.

How To Write a Business Purchase Agreement

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A business purchase contract is a vital legal document that encapsulates the terms and conditions set for the buying or selling of a business. Crafting this document protects both parties and ensures a seamless transfer of ownership. Loio, a reliable legal tech platform, provides excellent templates in various formats, including a simple business purchase agreement PDF, or, if you prefer, legal experts can help you in drafting an agreement.

Here is a step-by-step guide on creating a company purchase agreement, whether you are playing the buyer's or the seller's role:

Buyer
  1. Include the specific information of all parties involved, such as legal names and contact details. 
  2. Clearly mention the total purchase price and payment milestones.
    Include a comprehensive description of the business, its legal status, address, and proposed future plans.
  3. Prepare comprehensive details about the assets, liabilities, and intellectual properties included in the purchase.
Seller
  1. Provide the name of the business being transferred and any related business identification numbers.
  2. List the federal laws that underpin the agreement.
  3. Declare that the buyer will take over the business and list their obligations and liabilities.
  4. Describe the release of any claims on the company following the business purchase.
  5. Determine the legal language, based on your specific jurisdiction, delineating the buyer's rights and responsibilities post-purchase.
  6. Define how the purchase of business agreement will be recorded and who will manage this process. 

All parties involved should scrutinize the agreement in consultation with legal counsel to uphold their interests. Keep in mind that agreeing on the critical components of the document ahead of time, such as the release language or recording steps, is crucial for a frictionless process while preparing a company purchase agreement.

The proper creation and execution of a business purchase agreement are crucial steps in any business's sale or acquisition. A well-drafted agreement provides both parties with a comprehensive understanding of their rights and obligations, thus protecting each party from prospective complications. Consider using a customizable sample agreement to purchase business as it can streamline the process, saving time and providing a legally sound structure to your agreement. It will take you only a few minutes to fill in a business purchase agreement PDF template.

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