What are Business Purchase Documents Drafting?
Business purchase documents are various legal and operational contracts that businesses use when selling or purchasing a company. They can include non-disclosure documents to protect sensitive business information or documents required for due diligence before the transaction.
Read the rest of this article to explore the different types of business purchase documents, how to draft them, and why you should consider hiring a qualified lawyer for assistance to ensure clear, legally-valid business purchase agreements that help you accomplish your goals.
What are Common Business Purchase Documents?
Some of the most common business purchase documents include the following:
- Letter of intent. This lays the foundation for the transfer. It specifies what’s included in the deal and the purchase price.
- Purchase agreement. This is the main legal document. It will feature terms regarding both parties’ rights and duties under the agreement, as well as representations and warranties.
- Due diligence documents. Before the deal, the seller must provide documents to enable the buyer to conduct due diligence. This can include their financial statements, tax records, and any existing contracts.
- Non-disclosure agreement. An NDA protects business information and could be required to prevent breaches of confidentiality during the process.
- Employment agreements. If certain employees will stay with the company after it's transferred, these agreements define terms for how employees will be transferred, such as what their duties will be and how they’ll be compensated.
- Closing documents. When the deal is closing, these documents specify the deal’s financial elements. They might include a bill of sale to confirm the asset transfer or an assignment agreement, which transfers rights from the seller to the buyer.
What are Tips for Drafting Business Purchase Documents?
When drafting business purchase documents, the information you need to include will vary depending on the type of documents you require. Here are some things to consider when writing them.
Consider the Business Transaction
Before you draft any business purchase document, you should fully understand the transaction. Ask yourself if there is an asset or stock purchase, who the buyer and seller are, and what is excluded from the sale.
When you have as much information as possible, this will help you to draft clear, comprehensive agreements that protect both parties. Every document must have a specific legal and commercial purpose.
Keep the Documents Consistent
All the documents you require for your business purchase must be consistent. Check that all terms are used in the same way, and that names and other details match and are accurate, such as the purchase price. This prevents confusion that can result in disputes.
Fairly Allocate Risk
Think about the risks involved in the transaction so you can properly allocate them to parties. For example, specify limitations of liability and include indemnities to prevent one-sided or unbalanced clauses.
Consider Your Industry
Business purchase documents can vary across industries. There might be regulations and licenses to consider, depending on the industry in which you’re working. Since compliance obligations might require unique provisions, you want to ensure you understand what’s required so you don’t make drafting errors.
Include Due Diligence
Due diligence is an essential process to undertake during the transaction process. Gather relevant documents, such as financial statements, tax records, and corporate records.
Your business purchase documents should include the due diligence findings so you can draft information regarding indemnities and warranties that are customized to your specific situation.
Be Careful When Using Precedent Documents
Although corporate precedent documents can help you with drafting the business purchase documents you need, you should never copy them without first reviewing them closely.
This will ensure you can customize the documents according to your specific transfer and it prevents the use of outdated provisions or generic language that can create ambiguity and/or result in disputes.
How Does a Lawyer Help You Draft Business Purchase Documents?
Hiring a lawyer to assist you with drafting business purchase documents you need is advisable. It will give you peace of mind that your documents and agreements are legally valid and clear for both parties to understand.
Here’s a rundown of what a qualified lawyer will do to help you:
- Provide strategic advice. Experienced lawyers are able to evaluate your transaction and guide you on its legal implications.
- Draft legal documents. A lawyer will write clear, accurate, and legally enforceable documents so that you remain compliant.
- Customize the business purchase documents. A lawyer will avoid using generic document templates. Instead, they’ll tailor the documents to your specific industry, transaction, state laws, and business.
- Manage your legal risks. Thanks to their experience, a lawyer will be able to anticipate possible future issues so that they can include provisions to protect your interests.
- Help you conduct due diligence. A lawyer knows what’s required for due diligence. They’ll help you gather all the important information you need to feel confident about the sale.
- Make the closing process smooth. By preparing and executing the closing documents you require, a lawyer will ensure that all conditions have been met and efficiently close the transaction.
Where to Find a Lawyer for Business Purchase Documents Drafting
If you want to find the right lawyer to draft business purchase documents for you, you don’t have to wonder where to find and hire one. Online legal platforms make the process easier.
ContractsCounsel is an online legal marketplace that gives you access to a network of vetted lawyers. You can work with experienced, skilled lawyers who have the experience to help you with drafting and reviewing documents you require.
To request that a lawyer on the ContractsCounsel platform drafts your business purchase documents, here are the easy steps to follow online:
- Go to the ContractsCounsel marketplace.
- Post your project for free. Include a few details to help you find the most suitable lawyer, such as the business you’re selling or buying.
- Wait to receive multiple lawyer bids. You’ll get multiple bids from lawyers directly on the platform who have the experience to help you.
- Review the lawyers’ profiles. Go through the platform’s lawyer data, such as their location, client ratings for previous projects, expertise, and credentials.
- Connect with a lawyer you think is best suited to your requirements and hire them to draft your business purchase documents.
