Legal Documents Needed to Buy an Online Business

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,656 reviews

Jump to Section

Need help with a legal contract?

Post Project Now

E-commerce has allowed businesses to expand their market globally. Businesses that utilize online stores for business transactions have a competitive advantage over traditional brick-and-mortar businesses. At the same time, online businesses have additional legal considerations that must be accounted for.

When acquiring an online store, you should hire legal counsel to perform due diligence and ensure all documents are dotted and signed appropriately to avoid future liability.

These advantages range from reduced start-up and operational expenses to more creative content, more effective company operations, and many additional advantages to establishing an internet business.

Overview of Buying an Online Business

Buying an established online business with a relationship with clients, positive cash flow, proven online presence, and sales history is likely a safer option than starting a non-proven commodity.

There are several options to choose from, which can be exciting for an investor. However, the size of the market also makes online business sales susceptible to fraud, so due diligence can be a critical process to ensure the business transition can be performed successfully.

Here are some factors to consider when purchasing an online business:

  • The Potential Market of the Business. Examine the company's current performance and future possibilities.
  • Key Performance Indicators of Online Success. Examine the website's traffic and lead creation.
  • The Business’s SEO Performance. Check the website's rating in search engines.
  • Any Potential Metric Inflations. Look for any suspicious backlinks or black hat SEO techniques.
  • Key Competitors in the Market. Examine the business model and the product or service offered by the company.
  • Legal Assets Being Provided in the Purchase. Check to see what is included with any business acquisitions.
  • Customer Service Relations. Examine the company's web reputation and look for any complaints.

Some red flags in the acquisition of an online store can include:

  • A history of negative complaints
  • Disgruntled clients
  • High amounts of returns and chargeback

On the flip side, indicators that the business is being managed well include:

  • High ratings from the Better Business Bureau
  • Positive online reputation

SaaS companies and online stores are plentiful, so it may be difficult for a potential buyer to decide what e-commerce business might be right for you. However, here are some popular platforms potential buyers turn to:

  • Shopify is a leading e-commerce company with over 10,000 online stores. Shopify allows buyers to examine metrics like site traffic and income from the Shopify store. This data can provide confidence in the success of the business. In addition, the platform has an Exchange, displaying store traffic and revenue metrics.
  • is an auction-style website that allows merchants to list their online companies for a one-time charge before matching buyers and sellers based on preferences. When a sale occurs, the site charges a ‘success fee,' determined as a percentage of the selling price. Flippa also has Amazon storefronts, iOS, and Android applications, and domains in addition to Shopify stores.
  • Freemart is another online marketplace for buying and selling companies. A simple filter allows buyers to look for possible investments based on price, income, and website traffic. Businesses are free to list with the commission due on successful sales. Because Freemarket is an auction platform, prospective purchasers must bid through the bulletin board. The site administers the handover procedure once a deal is agreed upon.
  • Via Brokers is a website where sellers pay brokers a charge for their network and experience, which they use to match buyers and sellers to guarantee the greatest fit for the transaction. The site caters to more established enterprises making at least $100,000 per year in profit. Brokers are designed to work with partners to develop a marketing strategy, present executive overviews, and attract future purchasers.

Here is an article about the overview of buying an online business.

Legal Considerations for Buying an Online Business

While online businesses may present advantages to running operationally than traditional enterprises, due diligence is required before asset purchase to be aware of your legal duties and protect yourself from outstanding and future liabilities.

Assuming you've located the right online business and are satisfied with the purchase price, here are essential considerations to take into account:

Intellectual Property and Trademarks

Intellectual property pertains to the trademark, registered design, video material, blog, brochure, and other creative work of an online business. Trade secrets are another type of intellectual property that can include a patent, proprietary software, graphics, procedures, and even marketing techniques.

Intellectual property, in some cases, can be more valuable than the business itself. Therefore, purchasers must be critically aware of the intellectual property assets owned by the company and ensure these assets are included in the asset purchase.

The list of assets and intellectual property that will be transferred should typically be stated in the sale of a business agreement or in a separate assignment of intellectual property agreement that deals with the transfer of intellectual property.

The business you are purchasing from must own the intellectual property outright. If they simply license the property, they do not have the authority to transfer it.

Software and Technology

Suppose the business utilizes proprietary software or online tools and technologies such as SaaS company technology. First, you must confirm that the vendor will transfer ownership or a license to you. Otherwise, you may need to contact the third-party solution provider to guarantee that you may use the program without infringing on the intellectual property of others.

Meet some lawyers on our platform

George L.

1 project on CC
View Profile

Daehoon P.

72 projects on CC
View Profile

Max M.

102 projects on CC
View Profile

Kristen R.

27 projects on CC
View Profile

Domain Names

Another significant legal aspect is domain names. In most circumstances, transferring domain ownership and getting a domain name transfer agreement is straightforward. However, it is always suggested to include the transfer of company domain names within the business selling process and to have the domains described in the business sale agreement.

Marketing and Advertising.

Marketing and promotion are critical components of every business, particularly internet enterprises. Accordingly, various companies' rules and regulations exist to regulate and ensure corporate behavior and commercial activity fairness and openness.

For example, the Federal Trade Commission (“FTC”) regulates online advertising to prevent false representations on social media and online platforms. In Australia, the Australian Competition and Consumer Commission ("ACCC") requires businesses to guarantee that their clients are correctly and truthfully informed about the items and services they purchase. It also outlaws false or misleading advertising, inaccurate or misleading representations, and the imposition of unfair contract conditions.

Here is an article about the legal considerations of buying an online business.

Legal Documents Needed

The complexity of purchasing an online business stems partly from the legal documents needed when purchasing an online store. When performing due diligence for the purchase of an e-commerce company, various documents should be signed to protect it from future liability and ensure a successful purchase. Some of the documents include:

  • Business Purchase Agreement. A business purchase agreement is a legal contract between the buyer and seller. Purchase agreements can be broken up into two types of purchase agreements. Asset purchase agreements are used to purchase a company’s assets. They can be explicitly used to acquire individual assets from a company. An entity purchase agreement, on the other hand, an entity purchase agreement is designed to buy out an interest in the company instead of necessarily specific assets. These agreements support overall ownership regardless of the company’s makeup. They can be triggered to take effect right away or in time.
  • Bill of Sale. A bill of sale is a legal document that marks the transfer of ownership of an item in exchange for money to a third party. The seller usually drafts the bill of sale, which includes the business transaction information. It protects both the buyer and the seller in future conflicts.
  • Terms Sheet. A terms sheet is a nonbinding agreement describing an investment's fundamental terms and conditions. Term sheets are most linked with new businesses. Therefore, entrepreneurs believe this document is critical for recruiting investors with funds, such as venture capitalists, and sparking initial conversations.
  • Letter of Intent. A letter of intent is a document stating one party's preliminary agreement to conduct business with another. The letter describes the main details of a proposed contract. It is widely used in commercial transactions to allow serious negotiations to begin.
  • A Standard Confidentiality Agreement. A standard confidentiality agreement is a legally binding written agreement that establishes lawfully enforceable terms and circumstances that restrict the signer from exposing secret or private information. A confidentiality agreement typically has a specified length. It covers actions that are prohibited from occurring, allowing for negotiations to progress.
  • Exclusivity Agreement - An exclusivity agreement is a legal contract between two parties that prohibits one party (the " licensee "), often an inventor, from selling its product to a specific customer (typically the other party) for a certain length of time. It is frequent when two companies collaborate to form a joint venture in which each party contributes resources and experience to create a product or method.

Here is an article about the legal documents needed to buy an online business.

Do I Need a Lawyer to Buy an Online Business?

Buying an existing online business may be a terrific way to become a business owner. However, several key legal concerns must be addressed before beginning an internet business. The concerns raised differ depending on the nature of the website that supports the business, how it was produced, and the types of intellectual capital it includes.

Furthermore, doing business online involves many of the same commercial/legal risks and obstacles that any firm encounters, such as generating a monetizable business model and operating under the proper legal framework. Therefore, an internet lawyer who focuses on online businesses is highly advised to protect your business from future problems later.

Here is an article about whether you need a lawyer to buy an online business.

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.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

View Jose
Member Since:
February 13, 2021

Jose P.

Free Consultation
Get Free Proposal
San Antonio, Dallas
22 Yrs Experience
Licensed in TX
University of Pennsylvania

I am a corporate lawyer with expertise working with small businesses, venture capital and healthcare. Previously, I worked at large law firms, as well as head attorney for companies. I graduated from Harvard College and University of Pennsylvania Law School. I speak 5 languages (Spanish, French, Italian and Russian, plus English), visited over 60 countries, and used to compete in salsa dancing!

View Briana
Member Since:
February 15, 2021

Briana C.

Founder, Branch Legal LLC
Free Consultation
Get Free Proposal
10 Yrs Experience
Licensed in CA, MA, NY
Columbia University School of Law

Legal services cost too much, and are often of low quality. I have devoted my law practice to providing the best work at the most affordable price—in everything from defending small businesses against patent trolls to advising multinational corporations on regulatory compliance to steering couples through a divorce.

View Meghan
Member Since:
February 15, 2021

Meghan P.

Free Consultation
Get Free Proposal
4 Yrs Experience
Licensed in CA
University of Dayton

I am a licensed attorney and a member of the California Bar. I graduated from the University of Dayton School of Law's Program in Law and Technology. I love IP, tech transfers, licensing, and how the internet and developing technology is changing the legal landscape. I've interned at both corporations and boutique firms, and I've taken extensive specialized classes in intellectual property and technology law.

View Jo Ann
Member Since:
February 22, 2021

Jo Ann J.

Free Consultation
Get Free Proposal
Boston, MA
26 Yrs Experience
Licensed in MA
Suffolk Universtiy Law School

Jo Ann has been practicing for over 20 years, working primarily with high growth companies from inception through exit and all points in between. She is skilled in Mergers & Acquisitions, Contractual Agreements (including founders agreements, voting agreements, licensing agreements, terms of service, privacy policies, stockholder agreements, operating agreements, equity incentive plans, employment agreements, vendor agreements and other commercial agreements), Corporate Governance and Due Diligence.

View Charlotte
Member Since:
February 25, 2021

Charlotte L.

Self-Employed Legal Consultant
Free Consultation
Get Free Proposal
Arlington, VA
8 Yrs Experience
Licensed in DC, VA
University of Virginia School of Law

I hold a B.S. in Accounting and a B.A. in Philosophy from Virginia Tech (2009). I received my J.D. from the University of Virginia School of Law in 2012. I am an associate member of the Virginia Bar and an active member of the DC bar. Currently, I am working as a self-employed legal consultant and attorney. Primarily my clients are start-up companies for which I perform various types of legal work, including negotiating and drafting settlement, preparing operating agreements and partnership agreements, assisting in moving companies to incorporate in new states and setting up companies to become registered in a state, assisting with employment matters, drafting non-disclosure agreements, assisting with private placement offerings, and researching issues on intellectual property, local regulations, privacy laws, corporate governance, and many other facets of the law, as the need arises. I have previously practiced as an attorney at a small DC securities law firm and worked at Deloitte Financial Advisory Services LLC. My work experience is dynamic and includes many short-term and long term experience that span across areas such as maintaining my own blog, freelance writing, and dog walking. My diverse background has provided me with a stong skill set that can be easily adapted for new areas of work and indicates my ability to quickly learn for a wide array of clients.

View Don
Member Since:
March 1, 2021

Don G.

Attorney at law
Free Consultation
Get Free Proposal
Lafayette, LA
21 Yrs Experience
Licensed in TX
Texas Tech School of Law

Texas licensed attorney specializing for 20 years in Business and Contract law. My services include General Business Law Advisement; Contract Review and Drafting; Legal Research and Writing, including Motion Practice; Business Formation; Article or Instructive Writing; and more. For more insight into my skills and experience, please feel free to visit my LinkedIn profile or contact me with any questions.

View Jeremiah
Member Since:
March 5, 2021

Jeremiah C.

Partner/Attorney at Law
Free Consultation
Get Free Proposal
Houston, TX
14 Yrs Experience
Licensed in NV, TX
Thomas Jefferson

Creative, results driven business & technology executive with 24 years of experience (13+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. My engagements often include legal consultation & advisory roles, drafting of NDAs, TOS & Privacy Policies, contracts and corporate law, business strategy advice & consulting, in-house counsel, Founder & entrepreneur guidance and other roles as needed by my clients. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.

View Adam
Member Since:
March 5, 2021

Adam B.

Managing Partner
Free Consultation
Get Free Proposal
San Mateo, California
24 Yrs Experience
Licensed in CA
McGeorge School of Law

Seasoned technology lawyer with 22+ years of experience working with the hottest start-ups through IPO and Fortune 50. My focus is primarily technology transactions with an emphasis on SaaS and Privacy, but I also provide GC services for more active clients.

View Benjamin
Member Since:
March 11, 2021

Benjamin W.

Free Consultation
Get Free Proposal
Los Angeles, CA
7 Yrs Experience
Licensed in CA
UCLA School of Law

I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!

View Ema
Member Since:
March 12, 2021

Ema T.

Contract and IP Attorney
Free Consultation
Get Free Proposal
New York, NY
4 Yrs Experience
Licensed in NY
Chicago Kent

I am a NY licensed attorney experienced in business contracts, agreements, waivers and more, corporate law, and trademark registration. My office is a sole member Law firm therefore, I Take pride in giving every client my direct attention and focus. I focus on getting the job done fast while maintaining high standards.

View David
Member Since:
April 1, 2021

David B.

Free Consultation
Get Free Proposal
Trussville, Alabama
26 Yrs Experience
Licensed in AL
Birmingham School of Law

A twenty-five year attorney and certified mediator native to the Birmingham, Alabama area.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call