The Business Sale Agreement
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05th June 2013
Buying and selling a business can be a complex matter that is
difficult to understand if you are not legally trained or if you lack
the experience. This article will try to explain the contents of the
document in simplified form to help understand its core elements.
The basic framework of all business sale agreements are
same, and most will have clauses covering specific areas. The following
provides a good starting point for both the seller and purchaser to
- Division of the price between goodwill, equipment and stock.
- Assets to be excluded from the sale and to be retained by
- VAT - whether this will apply to the sale price.
- Apportionment of outgoings.
- Payment of the sale price - the manner in which the payment
is to be made on completion.
- Employees - if employees will transfer with the sale. If
Transfer of Undertakings (Protection of Employees) Regulations 1981
- Leasing or HP agreements - whether they will transfer with
- Apportionment of liabilities.
- Warranties - whether any warranties will be given by the
Also, whether any third party warranties will be transferred to the
- Premises - whether the premises occupied by the business
also be transferred in the sale. Please note that if the premises are
leased, then that will require a separate transaction involving the
landlord of the premises and could include a lease assignment or a
fresh grant of lease.
- Restrictive covenants - these can be restrictive covenants
created by the seller in the sale agreement or can be existing
covenants created by a third party.
It is important to note that the above list is a
list. Every business sale is individual and there will be specific
clauses applicable to it.
If you are buying or selling a business then it is strongly
advisable that you consult a commercial solicitor who can assist you in
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Article Published/Sorted/Amended on Scopulus 2013-07-15 10:53:56 in Business Articles