Purchase of Business Agreement

The seller

Is the seller a business or an individual?

Seller's full legal name

For a business, use its registered name, including "LLC" or "Inc." if it has one.

Street address

City

State

ZIP code

Email optional

Used for written notices.

Phone optional

The buyer

Is the buyer a business or an individual?

Buyer's full legal name

For a business, use its registered name, including "LLC" or "Inc." if it has one.

Street address

City

State

ZIP code

Email optional

Used for written notices.

Phone optional

The business and what is being bought

Date this agreement is signed

Name of the business being sold

The name customers know it by, for example "Main Street Bakery."

Address of the business

Street, city, state and ZIP code of the main location.

What does the business do?

For example, "a retail bakery and café selling baked goods, coffee and catering."

Which assets is the buyer purchasing?

Equipment, furniture and fixtures

Inventory

Customer lists and records

The business name, trademarks and logos

Website, domain names and social media accounts

Phone numbers and email addresses

Other intellectual property (recipes, designs, software, know-how)

Contracts the buyer will take over

Goodwill

This agreement covers a purchase of the business's assets, not of shares or membership interests in the seller.

Details of the purchased assets optional

For example, "two commercial convection ovens, a 3-door reach-in refrigerator and the point-of-sale system." You can also say that a list is attached.

Anything else the seller is keeping? optional

Cash, bank accounts, receivables and tax refunds stay with the seller automatically. List anything else, such as a personal vehicle or a piece of artwork.

Debts and obligations

Will the buyer take over any of the seller's debts or obligations?

In an asset purchase the seller usually keeps its debts. The buyer takes on only what is listed.

Price and payment

Total purchase price

Will the buyer pay a deposit when the agreement is signed?

Yes No

Will the seller finance part of the price?

Yes No

The buyer then signs a separate promissory note for the financed amount at closing.

Should the price be adjusted to the inventory counted at closing?

Yes No

Useful when inventory changes from day to day. The parties count it just before closing and the price goes up or down by the difference.

How will the price be divided among the assets?

Buyer and seller usually report the same division for tax purposes. Ask a tax professional how it affects you.

Closing

Closing date

The day the buyer pays and the business changes hands.

How will the closing take place?

How will the buyer pay the amount due at closing?

What else will the seller hand over at closing? optional

Keys, access cards and alarm codes

Passwords and account access

Operating records, manuals and supplier lists

Titles to any vehicles included

The seller always delivers a signed bill of sale and the needed assignments.

The seller's statements

Are any of the purchased assets subject to a loan, lien or security interest?

Has the seller given the buyer financial statements for the business?

Yes No

Any lawsuits, claims or government proceedings the seller is disclosing? optional

Leave blank if there are none.

For how many months after closing can a claim be made that a statement was untrue?

Often 12 to 24 months.

The buyer's statements and closing conditions

How will the buyer pay the amount due at closing?

Has the buyer had the chance to review the business records and inspect the assets?

Yes No

What happens with the business premises?

Other consents needed before closing optional

For example, "consent of Valley Flour Co. to assign the supply agreement."

Does the sale depend on the buyer getting a loan?

Yes No

Transition help

Will the seller help the buyer take over the business after closing?

Yes No

Seller non-competition (optional)

Will the seller agree not to compete with the business after the sale?

Yes No

Limited to the business's line of work, an area and a number of years. Whether and how far such a promise can be enforced depends on applicable law.

Indemnification

Should each side's liability for untrue statements be limited?

Taxes and final terms

Who pays any sales or transfer tax on the transfer of the assets?

Should rent, utilities and similar expenses be divided as of the closing date?

Yes No

Anything else both sides agreed to? optional

Which state's law should govern this agreement?

Usually the state where the business is located.

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The seller

The buyer

The business and what is being bought

Debts and obligations

Price and payment

Closing

The seller's statements

The buyer's statements and closing conditions

Transition help

Seller non-competition (optional)

Indemnification

Taxes and final terms

Review your answers

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