• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Legal Templates

Legal Templates
  • Business Forms
    Business & Contracts

    All of our legal contracts and documents are drafted and regularly updated by attorneys licensed in their respective jurisdictions, paralegals, or subject matter experts. Save your hard-earned money and time with Legal Templates.

    Top Business Forms
    Business Formation
    • Business Plan
    • LLC Operating Agreement
    • Articles of Incorporation
    • Corporate Bylaws
    • Buy-Sell Agreement
    Business Operations
    • Business Contract
    • Partnership Agreement
    • Non-Disclosure Agreement
    • Release of Liability
    • Letter of Intent
    Sales and Payments
    • Purchase Agreement
    • Sales Agreement
    • Invoice
    • Purchase Order
    • Business Purchase
    Employment and HR
    • Employment Contract
    • Employment Offer
    • Employment Verification
    • Freelance Contract
    • Non-Compete Agreement
    View All Business Forms
  • Real Estate Forms
    Real Estate

    All of our legal contracts and documents are drafted and regularly updated by attorneys licensed in their respective jurisdictions, paralegals, or subject matter experts. Save your hard-earned money and time with Legal Templates.

    Top Real Estate Forms
    Landlords
    • Lease Agreement
    • Property Management
    • Eviction Notice
    • Late Rent Notice
    • Lease Termination
    Tenants
    • Room Rental
    • Sublease Agreement
    • Roommate Agreement
    • Notice to Vacate
    • Early Lease Termination
    Home Ownership
    • Real Estate Purchase Agreement
    • Mortgage Deed
    • Quitclaim Deed
    • Deed of Trust
    • Moving Checklist
    View all Real Estate Forms
  • Personal & Family Forms
    Personal and Family

    All of our legal contracts and documents are drafted and regularly updated by attorneys licensed in their respective jurisdictions, paralegals, or subject matter experts. Save your hard-earned money and time with Legal Templates.

    Top Personal and Family Forms
    Estate Planning
    • Power of Attorney
    • Last Will & Testament
    • Living Will
    • Advance Directive
    • DNR Form
    Personal Finance
    • Bill of Sale
    • Loan Agreement
    • Purchase Agreement
    • Promissory Note
    • Sales Agreement
    Family Matters
    • Parenting Plan
    • Child Travel Consent
    • Divorce Agreement
    • Separation Agreement
    • Prenuptial Agreement
    Affidavits
    • General Affidavit
    • Gift Affidavit
    • Affidavit of Identity
    • Affidavit of Residence
    • Affidavit of Death
    View All Personal Forms
  • Support
    Resources
    • Business
    • Real Estate
    • Personal and Family
    • Financial
    • Estate Planning
    Support
    • About Us
    • Careers
    • Contact Us
    • All Legal Documents

    Monday - Friday | 9AM - 7PM EDT

    (855) 335-9779

  • Sign In
  • :email

Home Business Documents Business Purchase Agreement

Free Business Purchase Agreement Form

Use our free Business Purchase Agreement form to record the sale of a business.

Updated February 16, 2023

A Business Purchase Agreement, or Purchase of Business Agreement, is a legal contract used to officially sell any business to another person. A Business Purchase Agreement form can also be used only to sell some of a business’s assets or shares, not the entire business. In these cases, including all details regarding what assets or shares are being sold.

A Business Purchase Agreement is an official record of the sale and purchase and serves as proof of ownership for the buyer.

Table of Contents
  • What is a Business Purchase Agreement?
  • When to Use a Business Purchase Agreement?
  • How to Write a Business Purchase Agreement?
  • Business Purchase Agreement Sample
  • The Consequences of Not Having a Purchase of Business Agreement
  • Common Business Purchase Agreement Situations
  • Frequently Asked Questions
Business Purchase Agreement Forms by State
  • California
  • Florida
  • Texas

What is a Business Purchase Agreement?

A Business Purchase Agreement is like a bill of sale that documents the purchase of a business. Either asset of a business or shares in the company can be transferred. As a legally enforceable contract, this Agreement ensures that both the seller and purchaser follow through with their promises and creates an opportunity to confirm the terms and conditions of the transaction.

Use a Purchase Agreement instead to buy or sell the property.

A Business Purchase Agreement will identify the following essential elements:

  • Business: describe the company, assets, and/or stock being transferred
  • Closing Date: when the Purchaser will pay, and the Seller will deliver the assets
  • Confidentiality: both parties agree not to share the details of the business transfer
  • Non-Competition: the seller promises not to compete with the business
  • Non-Solicitation: the seller will not hire any of their former employees away
  • Parties: identify the Seller of the business and the Purchaser
  • Purchase Price: payment for the transfer, including any deposits or financing
  • Representations & Warranties: each party is relying on statements of fact or promises about the assets, business, and authority to enter the transaction

Negotiate the terms and conditions of the sale of a business and document the transaction with a Business Purchase Agreement at the closing. It’s important to equip yourself with the skills to develop a solid negotiation strategy to secure the best outcome from a business deal. [1]

As a reference, people often call this agreement by other names:

  • Agreement for Purchase and Sale of Servicing
  • Agreement of Purchase and Sale of Business Assets
  • Agreement to Sell Business
  • Asset Purchase Agreement
  • Bill of Sale and Assignment and Assumption Agreement
  • Business Sale Agreement
  • Business Sale Contract
  • Business Transfer Agreement
  • Contract for Sale of Business
  • Purchase of Business Agreement
  • Sale of Business Agreement
  • Share and Asset Purchase Agreement
  • Small Business Purchase Agreement

When to Use a Business Purchase Agreement?

If you are either considering selling or purchasing a business, you should memorialize such an important transaction in a Business Purchase Agreement to confirm all details are carefully considered and documented.

This Agreement allows both parties to prevent the following misunderstandings:

  • The seller does not have the required power or authority to sell the business
  • Business lacks the needed license, permits, or authorizations to operate
  • Financial statements have not been examined by a certified public accountant
  • Accounts receivable may be subject to undisclosed set-offs or counterclaims
  • Some liabilities or obligations have not already been paid or discharged
  • Dividends have been unexpectedly set aside or paid
  • Salaries and benefits to officers or employees have been unexpectedly increased
  • The existing condition of the company does not match Purchaser’s understanding

Consult your accountant, attorney, and broker (if any) for the best tax, legal, and financial implications of buying or selling a business in your state.

IMPORTANT: Supporting Documents

Business purchase agreements are typically accompanied by several supporting documents. Some of the documents you may need include:

  • Bill of Sale
  • Business Contracts
  • Trademark Assignment Agreement
  • Commercial Lease Agreement

How to Write a Business Purchase Agreement?

Here’s a step-by-step on creating a business purchase agreement with a free business purchase agreement template.

Step 1 – Parties and Business Information

A business purchase agreement should detail the names of the buyer and seller at the start of the agreement.

It will also need to include the information of the business being sold, such as name, location, description, and business entity type.

Parties Screenshot
An example of where to write party names in our business purchase agreement template

Step 2 – Business Assets

The business purchase agreement will set out the specific assets transferred in the sale. This could include physical assets such as vehicles, real estate, or furnishings and financial assets such as accounts receivable. It may also include intangible assets such as the business name, trademarks, patents, goodwill, and customer lists.

You will also want to include excluded assets that you explicitly do not want to include in the sale.

Business assets screenshot
An example of where you should include information about business assets in our business purchase agreement template

Step 3 – Business Liabilities

A business purchase agreement should cover whether the buyer assumes any liability by purchasing the business. Liabilities may include accounts payable, environmental liabilities, employee-related expenses, lawsuits, and contractual obligations.

Liabilities screenshot
An example of where to include information about assumed liabilities in our business purchase agreement template

If you need to, you can also include excluded liabilities — any liabilities explicitly not included in the sale.

Excluded liabilities screenshot
An example of where to include excluded liabilities in our business purchase agreement template

Step 4 – Purchase Price

One of the key elements in a business purchase agreement is the purchase price. Here you should detail how much the buyer will pay to the seller for the purchase of the business and if the buyer will be paying a deposit when the agreement is signed.

Purchase price screenshot from a business purchase agreement template
An example of where to include the business purchase price in our business purchase agreement template

You should also include whether you want to include how the purchase price will be allocated among the assets in the agreement and then detail how much will be allocated to each asset.

Allocation of purchase price screenshot
An example of where to include any allocation of the purchase price in our business purchase agreement template

Another element of the purchase price is purchase price adjustments. This covers whether any adjustments will be made to the purchase price at closing to account for any differences in the business between the time of signing the agreement and the closing date. This is to cover any changes to the value of the business, such as specific net working capital or fair market value, that are assumed by the buyer when signing the business purchase agreement.

Step 5 – Terms

The terms of a business purchase agreement take up the bulk of the agreement and are made up of important information such as:

  • Buyer’s representations and warranties
  • Seller’s representations and warranties
  • Conditions precedent (a condition or event that must occur before a right, duty, or interest arises)
  • A non-compete clause (whether the seller is prohibited from engaging in a similar business once the business is sold),
  • What should happen if a dispute arises
  • Any additional provisions

Step 6 – Signatures

To finish your business purchase agreement, signatures by the buyer and seller, or their representatives, are required to make the agreement binding — this may need to be witnessed and notarized by a notary public.

Signatures screenshot
An example of where to include signatures in our business purchase agreement template

Business Purchase Agreement Sample

Here’s what a typical business purchase agreement looks like:

Business Purchase Agreement Screenshot

Download PDF
Download MS Word

The Consequences of Not Having a Purchase of Business Agreement

After doing your research and negotiating the best deal, properly transfer the ownership of a business with proper documentation. Unless you memorialize your negotiation in writing, the thorny details of the deal could get lost or cause problems later.

Both parties should clearly understand the business’ outstanding debts and liabilities during the transfer to avoid surprise bills. You must make many important considerations before exiting a business, so you must have an exit plan in place. Check out these valuable tips from five entrepreneurs who successfully exited their businesses. [2]

Common Business Purchase Agreement Situations

Here are just a few of the situations when a Business Purchase Agreement is commonly used:

  • Sell your company name
  • Sell furniture, machinery, or supplies from your business
  • Purchase another company’s real estate or office
  • Sell only your customer list or accounts receivable
  • Ensure Seller’s representations and warranties are enforceable

Purchasers will want a guarantee from the Seller that the business is in good standing with the state and has the licenses needed to operate legally.

Frequently Asked Questions

What are Assumed Liabilities?

Assumed liabilities are liabilities that are taken on by a party purchasing a business under the terms of a contract. Examples of liabilities from purchasing a business can include accounts payable, environmental liabilities, employee-related expenses, and contractual obligations.

What are Buyer’s and Seller’s Representations and Warranties?

Representations and warranties in a business purchase agreement are facts and promises about what is sold. They are assertions or assurances given by the parties and are typically one of the most negotiated sections of the agreement.

The seller usually makes several representations about the business, which the buyer relies on being factual and correct and assisting in their due diligence.

Buyer’s representations and warranties focus on statements of facts and assurances regarding the buyer and its standing, specifically about their ability to purchase the business. 

What is a Condition Precedent?

Conditions precedent is certain events that must happen on the part of either the buyer or the seller for the closing transaction to occur.

What is a Non-Compete Clause?

A non-compete clause in a business purchase agreement dictates whether the seller is prohibited from engaging in a similar business once the business is sold. The non-compete is for a specific time and prevents the seller from participating in similar businesses in or near the city of the business being sold.

What types of business purchases can a business purchase agreement be used for?

A business purchase agreement can be used to sell any business to another person or business officially. A business purchase agreement will describe the company, assets, and any stocks that are being purchased.

What is the difference between an asset purchase and a business purchase?

A business purchase agreement is used to record a sale of a business and can be used to purchase the entire business or just some of a business’s assets or shares. An asset purchase agreement is solely used to purchase a business’s assets.

Legal Templates uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial guidelines to learn more about how we keep our content accurate, reliable and trustworthy.

  1. How to Negotiate When Buying a Business. https://www.inc.com/guides/201101/how-to-negotiate-when-buying-a-business.html
  2. Thomas Smale . How to Make a Lucrative Business Exit From 5 Entrepreneurs Who've Done It. (November 18, 2015). https://www.entrepreneur.com/article/252966

Related Business Operations Documents

  • Business Plan: Create a business plan to guide you through each stage of starting and growing your business.
  • Buy-Sell Agreement: A legal contract outlining what happens with the shares of a co-owner or partner if they die or leave the company.
  • Business Contract: An agreement in which each party agrees to an exchange, typically involving money, goods, or services.
  • Purchase Order: A written document that records a business transaction between two parties - the Buyer and Seller.
  • Business Proposal: A document used to form new relationships with other businesses and organizations.
Business Purchase Agreement Screenshot Preview PDF

Free Business Purchase Agreement Template

Create Your Business Purchase Agreement in Minutes!

Legal Documents

  • All Legal Forms
  • Business Forms
  • Real Estate Forms
  • Personal and Family Forms

Popular Forms

  • Lease Agreements
  • Power of Attorney Forms
  • Eviction Notice
  • Living Will
  • Non-Disclosure Agreement

Resources

  • Legal Resources
  • Business
  • Real Estate
  • Personal & Family
  • Estate Planning
  • Financial
  • Covid-19 Resources

Company

  • Pricing
  • About Us
  • Careers
  • Contact Us
  • Partner With Us
  • Legal Dictionary

Users

  • Account
  • Terms of Use
  • Privacy Policy
  • Do Not Sell My Personal Information
McAfee - Together is power.
Trustpilot
BBB Accredited Business

(855) 335-9779, Monday-Friday, 9AM - 7PM EDT

Facebook Twitter LinkedIn

Copyright 2023 Legal Templates LLC. Legal Templates LLC is not a lawyer, or a law firm and does not engage in the practice of law. Legal Templates cannot and does not provide legal advice or legal representation. All information, software and services provided on the site are for informational purposes and self-help only and are not intended to be a substitute for a lawyer or professional legal advice. Use of this site is subject to our Terms of Use. Legaltemplates.net is owned and operated by Resume Technologies Limited, London with offices in London United Kingdom.”

Esc

Free Business Purchase Agreement Form

Business Purchase Agreement Screenshot

The document above is a sample. Please note that the language you see here may change depending on your answers to the document questionnaire.

Fill in the details

Thank you for downloading one of our free legal templates!

Would you leave us a review?

We hope you've found what you need and are able to avoid the time, costs, and stress associated with dealing with a lawyer.

A review would mean the world to us (it only takes about 15 seconds).

Please check your download folder for MS Word or open tabs for PDF so you can access your FREE Legal Template Sample

Thanks again, and good luck!

Leave My Review