In business, acquisitions require a legal contract to officially sell and transfer a business entity from its owner to the new buyer. This document is called a business purchase agreement.
Using a business purchase agreement outlines the term and conditions of a transaction, including the transfer of company assets and liabilities.
A business purchase agreement can also be commonly used with a master purchase agreement or as an addendum to purchase and sale agreement.
Business lawyers with backgrounds in contract law and real estate can help you draft the right type of asset purchase agreement for your circumstances. These lawyers are legal professionals focusing on business matters, including a partnership agreement, dissolution or sale of corporations, taxation, and intellectual property.
They work with clients who need assistance in writing and reviewing various contracts. For example, in a business partnership, you may need a buy-and-sell agreement.
Here is an article describing a buy-and-sell agreement and how it works.
What Does a Business Purchase Agreement Lawyer Do?
A lawyer for business purchase agreement services drafts and reviews all legal documents pertaining to an asset sale. They ensure that the document allows you to sell a business entity officially and allows for them to sell their assets at fair market value.
Most importantly, the lawyer will outline all the terms and conditions pertaining to the transaction. These will vary significantly among buyers and sellers, so all parties must have a comprehensive understanding. Adding unique provisions can also help protect the financial welfare of both parties.
Depending on the type of sale, the lawyer can draft a stock purchase agreement or asset purchase agreement.
- Stock Purchase Agreement. A stock purchase agreement (SPA) is the transfer of ownership of company shares and titles to any associated assets and liabilities.
- Asset Purchase Agreement. An asset purchase agreement (APA) is the direct sale and transfer of ownership over all or a portion of a company’s assets and liabilities.
When buying or selling a business, there is an established legal process that each party must follow. Working with a lawyer for a business purchase agreement ensures that all the necessary measures are taken, and the standard provisions are all included.
Here is an article with ContractsCounsel’s guide to business purchase agreements.
See Business Purchase Agreement Pricing by State
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How Much Does a Lawyer for a Business Purchase Agreement Cost?
The average business purchase agreement cost on ContractsCounsel’s legal marketplace is $864.58.
This figure represents the typical cost of a project involving the drafting of a business purchase agreement. Of course, writing your asset purchase agreement is an option. Still, it would be best to consider having a lawyer review it before signing.
Lawyer fees vary by an attorney. Some charge a flat rate if a project is straightforward, while others offer their services hourly. Most lawyers cost between $200 to $500 an hour. However, this depends on a variety of factors, which include:
- Where you live
- Years of experience
- Whether you are a returning client
Suppose your business purchase agreement is complex or deals with large sums of money, assets, and liabilities. In that case, you will likely pay more to work with a lawyer. They will dedicate themselves to ensuring your document offers you the greatest level of protection throughout the transaction.
This way, you have the peace of mind you need knowing an experienced lawyer has been drafted or reviewed to protect your financial future.
Here is an article with an example of a business purchase agreement template.
Is a Business Purchase Agreement Legally Binding?
After both parties sign a business purchase agreement, it becomes legally binding. This means they will have to follow the dispute resolution agreement outlined in the document and face any consequences of breaching their agreement.
For the seller to officially sell their assets, they must sign the document, not just relinquish their assets to the buyer. Without a legal contract, the seller could still be held legally responsible for the business.
When buyers seek to purchase assets, they must submit a letter of intent or purchase offer. The seller can negotiate the terms and accept or deny the offer. In this situation, there is a formal exchange of intent and agreement between the buyer and seller. This adds an extra layer of financial security to the transaction.
Submitting a letter of intent or purchase offer is the first legal step toward buying a business. When selling a business, you must draft and present the buyer with a purchase agreement. The terms and conditions of this agreement can be openly negotiated as much as you like before signing.
Here is an article about how to negotiate a business purchase agreement.
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Do I Need a Lawyer for a Business Purchase Agreement?
Working with a lawyer for a business purchase agreement can protect both parties' interests and investments. As the seller, you have invested much time and money into your company. And as a buyer, you want to protect your purchase to prevent a seller from backing out or accepting payment without transferring ownership of assets.
Even if you draft your business purchase agreement, working with a lawyer offers valuable legal counsel that can help your transaction and safeguard your financial investments.
Post a project in ContractsCounsel’s marketplace to receive flat fee bids from lawyers for your project. All lawyers have been vetted by our team and peer-reviewed by our customers for you to explore before hiring.
