ContractsCounsel Logo
Home Types of Contracts Purchase of Business Agreement

Jump to Section

A Purchase of Business Agreement is a legal document that summarizes the provisions of the sale of a business from one person to another. This agreement, commonly known as a Sale of Business Agreement or Business Sale Agreement, is generally used when a business owner is selling their company to another person or entity and covers matters such as the payment terms, purchase price, and any prerequisites or contingencies that must be fulfilled before the sale can be concluded.

Important Elements of a Purchase of Business Agreement

A Purchase of Business Agreement is a legally binding document that establishes the terms and conditions of the sale of a business. Once both parties sign the agreement, they must abide by its terms. If either party fails to fulfill their obligations under the agreement, they may face legal consequences.

In addition, it is essential to note that a Purchase of Business Agreement is a complex legal document that necessitates the expertise of an experienced attorney. Both parties should seek the advice of an attorney before signing the agreement to ensure that they fully comprehend its terms and implications. And a purchase of business Agreement typically consists of the following sections:

  • Identification of the Involved Parties: This section identifies the buyer, the seller, and any other individuals or entities involved in the transaction, such as attorneys or brokers.
  • Description of the Business: This section provides a detailed account of the business being sold, including its assets, liabilities, and any intellectual property associated with it.
  • Purchase Price: This section outlines the purchase price for the business and how it will be paid, including any financing arrangements or installment payments.
  • Due Diligence: This section outlines the buyer's right to conduct due diligence on the business to ensure they are fully informed about its financial and operational status.
  • Representations and Warranties: This section contains statements the seller makes about the business, including its financial status, legal compliance, and other crucial information that may impact the sale.
  • Conditions Precedent: This section outlines any prerequisites that must be fulfilled before the sale can be completed, such as obtaining necessary permits or approvals.
  • Closing: This section describes the sale's closing process, including the transfer of ownership and any necessary legal documentation.

Importance of a Purchase of Business Agreement

The Purchase of Business Agreement (PBA) plays a critical role in business transactions by establishing the expectations and obligations of both parties. It is essential to ensure that both the buyer and seller are protected, and the purchase of business agreement achieves this through various means. Below are some reasons a purchase of business agreement is important.

  • Protection for Buyer and Seller: The purchase of business agreement protects both the buyer and seller by defining the terms and conditions of the sale. It includes outlining the purchase price, payment terms, and any warranties or representations the seller makes. By clearly stating these terms, both parties fully understand the transaction's expectations and obligations.
  • Transfer of Ownership: The purchase of business agreement facilitates the transfer of ownership from the seller to the buyer. It includes transferring assets, such as inventory, equipment, and intellectual property, and liabilities, such as legal claims and outstanding debts. The PBA also stipulates any conditions that must be met before ownership can be transferred, such as due diligence completion or legal dispute resolution.
  • Allocation of Risk and Liability: The PBA allocates risk and liability associated with the business to the appropriate party. It includes addressing outstanding debts or legal claims against the business. By doing so, the PBA protects both parties from unexpected legal issues and costs arising after the sale.
  • Warranties and Representations: The PBA includes warranties and representations the seller makes regarding the business. These statements assure the buyer that the business is being sold in good faith and that the seller has disclosed all relevant information about the business. These warranties and representations may include financial statements' accuracy, asset conditions, or compliance issues with legal or regulatory requirements.
  • Payment Terms: The PBA outlines payment terms for sale, including the purchase price, payment method, and payment schedules or milestones that must be met before ownership transfers. By clearly stating these terms, both parties agree on the financial aspects of the transaction.
  • Non-Compete and Confidentiality Agreements: The purchase of a business agreement may also include non-compete and confidentiality agreements that prevent the seller from competing with the business or disclosing confidential information about the business after the sale. After completing the transaction, these agreements protect the buyer from unfair competition or loss of trade secrets.
Meet some lawyers on our platform

Steven S.

16 projects on CC
CC verified
View Profile

Darryl S.

45 projects on CC
CC verified
View Profile

Daniel R.

139 projects on CC
CC verified
View Profile

Maria A.

3 projects on CC
CC verified
View Profile

Why Hire a Business Purchase Lawyer

Business purchases can be complex, and understanding the laws and regulations surrounding these transactions can be challenging for companies. Hence to navigate this process, companies need to seek the assistance of a business purchase lawyer. Here are some reasons why:

  • Expert Knowledge of Legal Aspects: A business purchase lawyer deeply understands contract terms and legal requirements that must be followed. They are well-versed in the latest legal terminologies and can help companies navigate the documentation process smoothly.
  • Negotiation Skills: Negotiating a contract is crucial to the business purchase process. A business purchase lawyer can help parties negotiate by identifying key starting points, collecting information, and presenting options to both sides.
  • Extensive Network: A business purchase lawyer has a vast network of professionals experienced in the merger and purchase process, such as business development experts, accountants, and financial officers. They can recommend experienced professionals to ensure the best possible outcome for both companies.
  • Documentation Preparation: Having all necessary documents in order is crucial during business transactions. A business purchase lawyer can help prepare and draft all required documents, including confidentiality agreements, non-disclosure agreements, consulting agreements, employment contracts, purchase or sale agreements, and vendor contracts.
  • Contract Review: Business purchase lawyers can review contracts and offer their professional opinion regarding any necessary revisions. They ensure that all parties are protected during the transaction and can identify potential issues that may arise in the documents.
  • Litigation Support: In litigation, a company must have a legal representative. An experienced business purchase lawyer can handle complicated litigation issues related to mergers and purchases, including trial preparation, research, and interrogatories.
  • Risk Reduction: Hiring a business purchase lawyer can help reduce a company's risk of lawsuit exposure. The lawyer can assist clients in complying with federal and state employment laws, helping the company remain proactive in preventing legal complications.
  • Lease and Agreement Review: Starting a new business venture often requires a reliable location, such as a commercial building or warehouse. A business purchase lawyer can help companies review all contracts, agreements, and terms before leasing or purchasing a property.

Key Terms for the Purchase of Business Agreement

  • Accretion: It refers to an enhancement in per-share metrics in post-transaction phases.
  • Acquirer: It is the purchaser organization that buys another company in an acquisition.
  • Asset Deal: The deal happens when the acquirer buys only the assets of another organization, excluding its shares.
  • Amalgamation: It refers to the unification of two or more companies into a new entity.
  • Conglomerate: It refers to a merger of businesses with unrelated companies.

Final Thoughts on the Purchase of Business Agreement

A Purchase of Business Agreement is important for any business sale transaction. It defines the terms and conditions of the sale, including the purchase cost, payment terms, and any conditions or contingencies that must be met before the sale can be completed. This agreement is legally binding, so both parties should seek the advice of an attorney before signing to ensure that they fully understand its terms and implications.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, Click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

Need help with a Purchase of Business Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,002 reviews

Meet some of our Purchase of Business Agreement Lawyers

Jane C. on ContractsCounsel
View Jane
4.9 (84)
Member Since:
October 9, 2020

Jane C.

Free Consultation
New York
19 Yrs Experience
Licensed in CT, DC, NY
Pace University School of Law

Skilled in the details of complex corporate transactions, I have 15 years experience working with entrepreneurs and businesses to plan and grow for the future. Clients trust me because of the practical guided advice I provide. No deal is too small or complex for me to handle.

Jeremiah C. on ContractsCounsel
View Jeremiah
5.0 (46)
Member Since:
March 5, 2021

Jeremiah C.

Partner/Attorney at Law
Free Consultation
16 Yrs Experience
Licensed in NV, TX
Thomas Jefferson

Creative, results driven business & technology executive with 24 years of experience (15+ 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. 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.

Mark P. on ContractsCounsel
View Mark
5.0 (8)
Member Since:
July 21, 2023

Mark P.

Free Consultation
Kansas City, MO
9 Yrs Experience
Licensed in KS, MO, NE, TX
University of Missouri - Kansas City I represent a diverse mix in a vast array of specialties, including litigation, contracts, compliance, business and financial strategies, and emerging industries. Credit for this foundation of strength goes to those who taught me. Skilled professors and professionals fostered my powerful educational and professional background. Prior to law school, I earned dual Bachelor’s degrees in Business Administration & Accounting from Peru State College. I received a Master of Business Administration degree from Chadron State College. My ambitions did not stop there. While working full time as a Senior Accountant for the University of Missouri, Columbia, I achieved the lifelong goal of becoming a licensed Certified Public Accountant (CPA). Mizzo provided excellent opportunities and amazing experiences. Managing over $50M in government and private research funding was a gift. As a high ranking professional in the Department of Research, I was given priceless insight into the greatest scientific, journalistic, medical, and legal minds in the world. My passion for successful growth did not, and has not stopped. I graduated summa cum laude (top 3%) with a Doctorate in Law, emphasizing in urban, land use and environmental/toxic tort law from the University of Missouri, Kansas City. This success lead to invaluable experiences of serving as Hon. Brian C. Wimes' judicial clerk for the U.S. District Court for the W. D. of Missouri, as a staff editor/writer for UMKC Law Review, and as a litigation and transactional attorney with Lathrop GPM (fka Lathrop & Gage). My professional and personal network is expansive, with established relationships throughout the U.S. and overseas. Although I engage in legal practice all over the country, I maintain law licenses in Missouri, Kansas, and Nebraska. Federally, I hold licenses in the W.D. and E.D. of Missouri and the District of Nebraska. To offer extra value, efficiency, and options, I maintain a CPA license and am obtaining a real-estate brokerage license.

Fabian G. on ContractsCounsel
View Fabian
4.5 (2)
Member Since:
May 9, 2023

Fabian G.

Managing Attorney at Apex Legal Solutions PLLC
Free Consultation
Miami, Florida
3 Yrs Experience
Licensed in FL
University of Miami School of Law

Fabian graduated with honors from the University of Miami School of law, where he served as the articles and comments editor for the law school's Race and Social Justice Law Review. He received the John F. Evans Memorial Scholarship Award for excellence in the university's Litigation Skills Program and the HOPE Pro Bono award for completing more than one hundred (100) pro bono hours. Additionally, he received the CALI Excellence for the future award in Sports Law. He focuses his practice on corporate, real estate and immigration matters. Fabian has experience representing luxury hotel owners and operators in connection with the drafting of hotel management agreements, restaurant license agreements, and complex restaurant leases for domestic and international projects including: Nobu Tulum, Nobu Punta Cana, Nobu Orlando, Nobu Chicago and the Nickelodeon Hotel in Riviera Maya, Mexico, among others. He has represented clients in the commercial real estate industry in connection with the drafting of purchase and sale agreements, promissory notes, and mortgages. Lastly, Fabian routinely counsels corporate clients in connection with the drafting of articles of organization, operating agreements, and other documents related to acquisitions, restructurings and investments.

N'kia N. on ContractsCounsel
View N'kia
Member Since:
May 9, 2023

N'kia N.

Founding Partner
Free Consultation
North Carolina
8 Yrs Experience
Licensed in NC
NCCU School of Law

I am a business law attorney with substantial experience with contracts and contract disputes. I support both "professional" services provider (such as consultants and advisors) and "creative" services providers (such as creators and ghostwriters). Future-proof your business with contracts that are customized to your unique goals. My special interests include services agreements, employment agreements, severance agreements, independent contractor agreements, termination agreements, restrictive covenants (such as confidentiality agreements/non-disclosure agreements, non-competition agreements, non-solicitation agreements, and non-disparagement agreements), alternative resolution agreements, and settlement agreements. *** Any reference to a "FREE consultation" is for a "Discovery Call" (legal information or information about my services). For legal advice, please schedule a "Strategy Call." [All calls are by appointment.] [I am not currently accepting new clients for disputes related to construction contracts or defects, real estate transactions, commercial or residential leases, or employment.] Address is for mail only.

Venus C. on ContractsCounsel
View Venus
Member Since:
May 9, 2023

Venus C.

Principal Attorney
Free Consultation
West Palm Beach, Florida
20 Yrs Experience
Licensed in FL
Nova Southeastern University, Shepard Broad College of Law, J.D., magna cum laude

Venus Caruso is a Florida-based attorney who has been helping companies and individuals with their contract needs for over 19 years. She leverages her 10 years spent as a complex commercial litigator and 7 years spent as in-house legal counsel to help clients with their contract needs, whether it’s preparing a contract or providing feedback and redlining. Some types of contracts that Venus can help you with include NDAs, digital agency agreements, marketing agreements, employment agreements, Florida LLC operating agreements, software development agreements, non-competition and non-solicitation agreements, non-circumvention agreements, sales rep agreements, software agreements, SaaS agreements, contract amendments, and termination of contract agreements.

Erik W. on ContractsCounsel
View Erik
Member Since:
May 22, 2023

Erik W.

Free Consultation
Orlando, Florida
14 Yrs Experience
Licensed in FL
Florida A&M University College of Law

Erik J. Washington completed his undergraduate studies at Florida A&M University, where he earned his Bachelor of Science degree in Business Administration with a concentration in Finance. Mr. Washington went on to earn his Juris Doctor from Florida A&M University College of Law. Upon receiving his J.D., Mr. Washington was admitted to The Florida Bar and the United States District Court, Middle District of Florida. Mr. Washington started his legal career by working with a boutique Orlando law firm where his practice concentrated on family law, bankruptcy, helping clients with estate planning and probate matters, and advising homeowner’s association boards on proper administration. After that experience Mr. Washington later joined another mid-size Orlando law firm where he would eventually become the Managing Consumer Bankruptcy Attorney where he oversaw the filing and administration of hundreds of chapter 7 and chapter 13 cases. Prior to starting the Washington Law Firm, Mr. Washington was an associate at a Central Florida Bankruptcy law firm working under the tutu ledge of a highly respected bankruptcy attorney with over 20 years of bankruptcy experience. Mr. Washington has learned that bankruptcy is a tool designed that not only benefits a person in debt but is also good for the economy as a whole. It is because this new beginning and fresh start that it becomes a means of not only helping a person in debt, but it gives that person once in debt the chance to reestablish good credit and yet again borrow money to spend. Mr. Washington focuses on consumer bankruptcy, real estate, probate, and auto accidents.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a Purchase of Business Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,002 reviews
Corporate lawyers by top cities
See All Corporate Lawyers
Purchase of Business Agreement lawyers by city
See All Purchase of Business Agreement Lawyers

ContractsCounsel User

Recent Project:
Commercial Purchase Agreement for small business acquisition
Location: Illinois
Turnaround: Over a week
Service: Contract Review
Doc Type: Business Purchase (all docs)
Page Count: 25
Number of Bids: 6
Bid Range: $850 - $5,000

ContractsCounsel User

Recent Project:
Location: Montana
Turnaround: Over a week
Service: Drafting
Doc Type: Business Purchase (all docs)
Number of Bids: 4
Bid Range: $499 - $2,500

Need help with a Purchase of Business Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,002 reviews

Want to speak to someone?

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

Request a call

Find lawyers and attorneys by city