These agreements can be used by the buyer or the seller throughout the sale process. Of course, they are templates for the final contract. However, they can also be used before marketing, as an aide-memoire during negotiation, and as the basis of your heads of terms.
Every template includes a large choice of warranties.
If you are buying the shares in a company and not the assets of the business, you should use a company purchase agreement.
This is a comprehensive agreement for the purchase and sale of any type of business. It is the master version on which our other documents are based.
It includes:
This business sale agreement template has been written for the purchase of a restaurant, pub or entertainment business such as a nightclub.
Included are:
Use this simple agreement to buy a food retail business where food is consumed on the premises. It is suitable for the purchase of one or more outlets, and where the transaction is of any value.
It includes provision for transfer of leasehold premises.
This agreement is suitable for buying or selling a business with one or more outlets that sell food not consumed on the premises.
It covers transfer of stock, leases, and any website, and provides a full menu of warranties.
It also includes provisions to transfer employees and other contracts such as those with suppliers.
This document is suitable for buying or selling a retailer or wholesaler.
It includes:
This document is suitable where the transaction involves: transfer from a sole trader or partnership to a company owned by the same people. It is for use when an existing business incorporates to take advantage of a limited company structure.
It is much simpler version, since the owners of the acquiring company do not need warranties or provision for a guarantor.
This is an agreement to buy a website that is complete, but not yet trading.
It could be used:
It is suitable for any type of website.
Provisions include transfer of all intellectual property to the acquirer.
An agreement for the sale and purchase of any manufacturing business.
The type of goods produced is not important within the document. Additional production services such as finishing and packaging could also be provided by the manufacturer.
The document provides for:
This is an agreement to buy a business of any size that provides professional or personal services.
The services could be of any type. Examples include: legal services, accounting, surveying.
The document includes provision for transfer of leasehold premises, and a large menu of related warranties.
This document is suitable for the purchase of a business that delivers a service via the Internet, either B2C or B2B.
Examples include: an online advertising management platform; a subscribe-to-access news website; a property search portal; and an online gaming site.
It includes:
This is a simpler version of our agreement to buy an Internet-based services provider, that do not have premises.
Examples might be: a blog that generates income from advertising; or an affiliate site.
There is a short menu of relevant warranties.
It has been drawn to be easy to use for parties who want a simple deal, completed on the same day with the full price paid in cash.
Use this short document to buy a home-based business that sells goods, or goods and services online.
It includes:
It assumes that neither premises nor employees will be transferred with the sale.
This is a purchase agreement for a business that repairs or services vehicles, machinery or plant, on an ongoing contractual basis or through off-the-street trade. It is suitable whether the customers are B2C or B2B.
Examples include:
Provisions are specific to this type of service station or gagrage, and include those for transfer of property and employees to the acquirer.
Use this contract to buy or sell a business that provides a face-to-face service to consumers.
It is a short document, stripped down to cover the requirements of a simple business that does not operate from business premises, and that does not have an e-commerce enabled website.
Examples of businesses that could be sold using this agreement include those offering:
The agreement:
There are provisions for transfer of a simple website and for VAT. Also included is a short menu of suitable warranties.
This is a business purchase agreement for a small construction or property renovation business.
Examples include:
It is not suitable for the sale of a house-builder.
Use this agreement to buy or sell second hand plant, machinery or equipment.
This is for a one-off sale where seller is off-loading surplus assets and will give only limited warranties. It deals largely with making sure buyer obtains good tile and proper arrangements are made for payment and transfer of the plant to the buyer.
The document includes:
The essence of this agreement is that seller gives no warranties so the buyer has little protection. What he sees is what he gets. The reason for the sale is not relevant.
The document is not the sale of a business as a going concern but of assets in a "break-up" situation.
For example, it might be used to sell:
Examples of use might be:
If the document isn’t right for your circumstances for any reason, just tell us and we’ll refund you in full immediately.
We avoid legal terminology unless necessary. Plain English makes our documents easy to understand, easy to edit and more likely to be accepted.
You don’t need legal knowledge to use our documents. We explain what to edit and how in the guidance notes included at the end of the document.
Email us with questions about editing your document. Use our Lawyer Assist service if you’d like our legal team to check your document will do as you intend.
Our documents comply with the latest relevant law. Our lawyers regularly review how new law affects each document in our library.
Use a business sale agreement to transfer part of, or an entire business to another. The business owner is typically the party selling the business. The acquirer may be an individual, a partnership or a company. The business may be any of a range of industries and sectors.
An asset purchase agreement is commonly used when selling the business and assets, as opposed to a share purchase agreement, which involves the transfer of company shares.
Usually, it is the business and assets that are sold and the liabilities retained by the seller. This is distinct from a share sale, where the buyer acquires the shares of the company and thus takes on both assets and liabilities. Assets may include land and buildings, plant and machinery, equipment, stock, work in progress, and intellectual property (‘IP’) such as a website or customer database. In other words, any part of an operational business.
An SPA (Sale and Purchase Agreement) is a legal document and a legally binding contract between two parties, typically the buyer and seller, in business transactions. It establishes the legally binding terms between buyer and seller, outlines the purchase price and payment structure, and defines what assets are included in the transaction.
As a legally binding document, the SPA provides legal recourse if the terms are breached, protecting both parties through warranties and indemnities and ensuring they understand their rights and obligations. Additionally, it sets out completion mechanics and addresses potential future disputes through clear dispute resolution procedures, making it an essential document for any business acquisition.
Usually it is the acquirer who proposes the terms of the contract. The reason is that they have the greater need for legal protection because they know less about the business than the seller.
However, there is nothing to stop the vendor from proposing initial terms.
Our business sale agreement template protects both sides. By including a greater number of warranties, the contract can be made to favour the acquirer.
To use this business purchase agreement, edit with the exact terms you agree, have both sides sign it (no witness necessary), and date it to make it legally binding. There is no requirement to take legal advice or any other sort, although you may wish to do so if there is much at stake.
Much needs to happen before you reach completion. The buyer is likely to want to know everything and the seller still wants to avoid reducing his price.
In business transactions, the comprehensive nature of the agreement ensures all aspects of the transaction are covered, from due diligence requirements to dispute resolution mechanisms. Other documents may also be required to supplement the main business sale agreement, such as disclosure letters or ancillary agreements.
The following provisions are common to most of these business sale agreements, but sometimes the ways they are applied are different for each. In other words, the exact terms may be different.
As an example, every buyer will want to prevent his seller from setting up in competition, but how we make that happen is not the same for every transaction.
Identity of the subject of the sale
The business name may not be enough if it is merged into another organisation. Identifying exactly what is being transferred is important for future reference.
Similarly, excluded assets may be important to note.
The parties could be companies or one or more individuals.
We would suggest that the buyer should insist on a guarantor. This is particularly important when the vendor is a company that might cease to exist the day after the closing date of the deal. If one party fails to fulfill their obligations, the agreement may provide remedies or protections for the other party.
The buyer buys the assets in the business. Debts remain due to be paid off by the seller (most likely from the proceeds). The buyer does not take them on. However, we provide for the seller to agree to pay them off promptly so that suppliers do not hesitate to supply the new owner.
The price payable is probably the thing most on the mind of both parties.
However, it is not just a question of a lump sum payment, whether for cash or shares in acquirer. The total purchase price, as specified in the sale and purchase agreement (SPA), includes any upfront payments or deposits required as part of the agreement, in addition to the remaining balance.
How it is apportioned between goods, goodwill, fixed assets, and IP may also be important for both the seller and the buyer for efficient tax planning.
Timing of payment is not apportioned.
In the excitement of the completion, it is very easy even for professionals to forget something.
Every contract provides a list of documents and other things to be exchanged at completion.
There are restraints against future direct competition by the seller in tough terms, cover for confidentiality of the terms of the deal itself and many other matters.
We believe our careful words will minimise the freedom of a seller to compete after the sale. If you are a seller, of course, you will want to edit these accordingly.
We have assumed that every business will use its website in ways we would expect. For example, a repair garage might not have a website at all, but if it does, it will not use its website for e-commerce.
There may be other IP that needs to be registered at transfer, such as trade marks.
When a business is sold in the UK, existing contracts typically transfer to the new owner as part of the asset purchase. However, some material contracts may require third party consent before transfer, particularly those containing change of control clauses. The business sale and purchase agreement should specifically address which contracts will transfer and identify any that require regulatory approval or customer consent.
Employment contracts are governed by TUPE regulations, which automatically transfer employees to the new owner. It’s essential to conduct thorough due diligence to identify all contractual obligations and ensure proper transfer procedures are followed, and to review all relevant information, including financial, legal, and operational details.
The basic structure on any business purchase or business sale agreement is based on warranties. Warranties are promises made by the seller to the buyer. Over the years they have evolved into a system whereby each warranty stays in the same exact form as the buyer wants and is not edited. Instead, if the seller cannot make the promise, he qualifies its terms as part of a disclosure letter.
The warranties we provide in our business sale agreement give generous cover to the buyer. You will probably want to delete a few, but they are drawn to be appropriate for the particular type of transaction to which that document relates.
We have taken great care to draw the warranties in simple language so that both sides are absolutely clear about what is being warranted. We have included a large choice because it is easier for you to remove what you don't need than to word new warranties yourself.
Some of these include up to 100 warranties covering a wide range of affairs, from tax and accounts to contracts, the real properties, employees, IP, information technology and more.
The real life experience of our legal team is that it is more efficient by far, to complete the deal on the day the contract is signed than to sign it for completion and payment at a future date. The main problem with future completion is that an awful lot can change in the course of a few days.
The downside of same day completion is that transfers of some property simply cannot be arranged as the bank draft is handed over. This applies most obviously to transfers or real property, leases, domain names and sometimes licensed IP. In these agreements we have covered these points as far as possible, but much of it is down to you to arrange for everything to come together when the cash is handed over and the agreement dated.
What property will be handed over at completion
The buyer will need to know what tangible assets and other property he or she will take ownership of when the purchase price is transferred.
The list includes tangible assets such as hardware, equipment, and stocks of goods, as well as software, customer information, special information letters to suppliers and customers – and anything special to your business that you need to add.
Most businesses trade from business premises, which may be a private house or a series of buildings set on an industrial park. The agreement provides for the transfer or lease of these business premises where applicable.
We have provided for the possibility of the seller also selling the commercial property used by the business. Where specified, the agreement is also an enforceable contract for sale of the property.
In other cases, a business will lease its property. We have provided for that too in a transfer of the leasehold interest. So unless we note otherwise, each document covers the commitment to complete the property transfer (when you will need a conveyancer) as well as a sale of the business.
Most people do not buy or sell businesses often. Even if you have done so before, it may not have been for some time.
Our guidance notes are particularly detailed, running in most cases to half the length of the contract and warranties combined. They include a full explanation of the TUPE regulations, of how warranties work and of how to deal with contracts for sale of property.
To create a simple business agreement, start by clearly identifying all parties involved and the specific subject of the transaction. Define the purchase price, payment terms, and what assets or services are included. Include basic representations about the business's legal status and financial position. Add restrictive covenants to prevent unfair competition and specify a completion date.
Whilst templates provide a useful starting point, complex business transactions often require professional legal advice to ensure all regulatory requirements are met. The agreement must be signed by all parties and properly dated to become legally binding.
Selling your business in the UK involves several key steps. The sale process typically includes preparation, negotiation, agreement drafting, and transfer procedures, guiding you from the initial valuation to the final completion of the transaction. First, obtain a professional valuation and prepare comprehensive financial records for due diligence. Identify potential buyers and maintain confidentiality during initial discussions. Draft heads of terms outlining the basic commercial terms, then negotiate a detailed business sale and purchase agreement.
This agreement should include warranties, indemnities, and restrictive covenants. Ensure all regulatory approvals are obtained and material contracts can transfer. Finally, complete the transaction by executing all documents, transferring assets, and receiving payment. Professional legal and tax advice is recommended throughout the process. For more information on the subject please read our information article at https://www.netlawman.co.uk/ia/selling-your-business
We have included in this section three other templates of purchase of business agreement for slightly different circumstances.
When your business reaches a certain size, you may wish to transfer your existing business into a limited company or a limited liability partnership (LLP) by incorporating it into a new company or LLP structure. This allows you to benefit from the limited liability that these business structures offer.
If so, you would likely transfer all of the assets to that new vehicle, unless there is an advantage (such as one for tax) in keeping back some to sell at a later date, to license or lease.
You sign this business purchase agreement twice - once for yourself as seller and once as director or partner of your acquiring company or LLP. You do not need a witness for this sort of business purchase agreement, but it may be a good idea to have one so that the date of the agreement cannot later be challenged.
You should record the terms of the transfer in the business purchase agreement so as to satisfy the requirements of:
This business purchase agreement is for buying or selling assets, rather than the whole business as a going concern.
You could be selling or buying plant, equipment, a customer list, vehicles, stock, work in progress, software, insurance re-claimed goods, fire-damaged goods, or any other asset.
The only thing that you should not use this business purchase agreement to buy or sell is real property (land and buildings).
The key point about this business purchase agreement is that the seller gives no warranties.
Particularly we envisage that it might be used for a hive-down or any other sale by a liquidator or administrator or trustee in bankruptcy.
This business purchase agreement is for a straight purchase of business assets. The transaction is not a sale of business. It could cover any goods at all,but drawn particularly for bulk deals. It can be used where the counter-party may be any person or organisation in any country.
Whatever the asset or parties, this business purchase agreement provides the protection to both sides with a set of fair terms.
Net Lawman has always been the first choice of buyers looking for a business sale agreement for the reason it comes with complete guidance notes, drawn by a qualified solicitor and cover many practical matters that parties may overlook.
Most Net Lawman documents are drawn to protect our document buyer as far as possible. In some cases we deliberately over step what a court may decide, knowing that most people do not know what will hold firm and what will not. We do that so as to give you the edge, the advantage. Any competent solicitor will do this too.
However, there is no point in our drafting a document for you which the other side will not accept. We want to make your life easy as well as protecting you. So if you find a paragraph which favours your counter-party more than you would like, by all means edit or delete it.
