What Is Importance Of Business Sale Agreement?

By Author: Robert Mark
Total Articles: 7
Comment this article

It is the matter of choice of the business owner to sell or not to sell the business. But when you have decided to sell your business then you need a business sale agreement that fulfil all the relevant statutory requirements. 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. If there are more than one business owners like partnership, company then the each owner can sell his share in accordance with provision of the articles of association and other rules that decide:
• Who can sell;
• How they sell;
• Whether they need consent of co owners, partners, and shareholders.

A business sale document is an agreement that defines the rights and obligations of both the seller and buyer. A business sale form must comply with all relevant statutory requirements and it must be in writing.

There are many steps to buying or selling a business such as valuing the business, getting tax advice, market research and marketing, preliminary offers, negotiating terms, heads of agreement, legal sale and ...
... purchase agreement, completing due diligence, and finally, completing the sale.

You must ensure that each phase of the negotiation is documented in order to include all agreements and conditions in the final contract. Do this even if the business is small and the sale process is straightforward. Business sale document first covers the process of the deal - what is being sold, where it is, how it is to be transferred, and so on.

It is vital for speedy and effective transaction that the seller gets together absolutely all the relevant documents which will be required on completion. It is a best step to provide a list of them to the Buyer with a copy of the agreement and ask for approval. The Buyer cannot then protest later if the same documents are then handed over on completion.

If you have chosen to sell the business or buy the business then you need a comprehensive business sale agreement that cover all the provision relation to the sale of business. Business sale agreement must specify that how the buyer will pay the amount of the sale. A business sale agreement must clearly explain the subject matter of sale i.e. what is sold or bought.

The business sale agreement is a major document in buying the business assets or the stock of a corporation. A business sale form is an important document because it transfers the asset, rights from the seller to buyer. The business sale contract must contain the following important provisions:
• Interpretation
• Agreement for Sale
• The Purchase Price
• Items to be delivered at completion
• Completion
• Stocks
• Debtors
• Creditors and Liabilities
• Tax
• Warranties by the Seller
• Future Activities
• The Guarantor
• Communications
• Miscellaneous Matters
• Jurisdiction etc

Once a sale has been agreed it is usually in the interest of both parties to complete as soon as possible. The seller will have lost interest in day to day operations while the buyer is not only bursting with enthusiasm and ideas but fears the seller will neglect vital matters.

If you have decided to sell/buy the business; Net Lawman provides you more information about these procedures in the drafting notes that come with each business sale document.