Over the years, lawyers have tried to simplify the process by drafting a single legal agreement which covers all the various aspects of the business and allows for the sale of the business to be dealt with in one single swift transaction. But even today, buying or selling a business is by no means an easy task and it can be a complex matter.
The basic areas that need to be considered remain largely the same for most small businesses where there is a low value transaction.
Briefly, the business sale agreement will need to deal with the following:
1.Â The price and a breakdown of this dealing with the goodwill, equipment and stock.
2.Â A list of the assets that are excluded from the sale and to be retained by the seller.
3.Â VAT applicability.
4.Â Employees – if there are any employees of the business they will pass with the business under the TUPE regulations.
5.Â How payment of the price will be affected on completion.
6.Â Whether any equipment or services which are leased or bought by the business by HP agreement are to transfer with the sale.
7.Â Warranties to be given by the seller to the buyer, including and limitations on them.
8.Â Any restrictive covenants to be applicable to the seller and/or the buyer.
9.Â Existing liabilities of the business – how these are to be dealt with, including their apportionment where necessary.
10.Â If the premises occupied by the business are to be transferred (freehold or leasehold).
As every business is individual, the business sale agreement needs to be drafted and tailored to suit it perfectly. If you are contemplating selling or buying a business, then get in touch with one of the lawyers in our Commercial Department who will be happy to advise and assist.