The Business Sale Agreement
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05th June 2013
Buying and selling a business can be a complex matter that is
often
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
largely the
same, and most will have clauses covering specific areas. The following
provides a good starting point for both the seller and purchaser to
discuss:
- Division of the price between goodwill, equipment and stock.
- Assets to be excluded from the sale and to be retained by
the seller.
- 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
so, then
Transfer of Undertakings (Protection of Employees) Regulations 1981
will apply.
- Leasing or HP agreements - whether they will transfer with
the business.
- Apportionment of liabilities.
- Warranties - whether any warranties will be given by the
seller.
Also, whether any third party warranties will be transferred to the
buyer.
- Premises - whether the premises occupied by the business
will
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
non-exhaustive
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
the process.
About the Author
Lawdit
Solicitors offer services and advice for litigation,
commercial contracts, Intellectual Property and IT legal agreements. We
are experts in commercial law with a heavy emphasis on Intellectual
Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of
Higher Court Advocates and we are the appointed Solicitors to the
largest webdesign association in the world, the United Kingdom Website
Designers Association.
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Article Published/Sorted/Amended on Scopulus 2013-07-15 10:53:56 in Business Articles
