Add Equipment Sales Agreement Template Initials with airSlate SignNow

Sign business purchase agreement

the purchase agreement is also important because in the exhibit section it lists all the contracts of the business that you are buying once you have found the business you want to buy and the offer that you have given through the letter intent has been accepted you can then focus on closing the deal and fully buying the business the first thing you want to do is start a very thorough due diligence you may have done some earlier due diligence where you ask the buyer and the employees some basic questions and you towards the building but now it's time to really deep dive and complete and accountant due diligence as well as the legal due diligence of the business to ensure you actually buying the business that you think you're buying starting with the accounting due diligence you want to verify that their actual bank accounts associated with the business the company has been paying these taxes and historical financial records are accurate which can allow you to make projections for the future earnings of the company when completing the legal due diligence you want to focus on guaranteeing that all third party contracts of the business can be transferred to you all building and equipment leases can be transferred to you as well and you want to also focus on drafting the purchase agreement it is important to know the difference between the letter of intent and the purchase agreement the letter of intent is roughly about four pages and is non-binding but the purchase agreement is about forty pages and it's typically absolutely binding once parties signed the agreement however there may be conditions that will prevent the purchase agreement from being final such as the condition of financing meaning the deal can only close if you gather enough money to buy the business or the condition to board approval meaning the owner can only sell you the business if the Board of Directors approve of selling the business the purchase agreement is probably the most important contract to consider when buying a business the purchase agreement discusses the type of legal entity that will acquire the business because you the individual would not be purchasing the business businesses to a degree are treated as people because they can purchase and sell things just like a person can but they have the added benefit of offering legal protection the purchase agreement also determines whether the new legal entity will be purchasing the stocks or the sets of the business the benefit of purchasing the assets of the business instead of the stock is that you can leave behind the bad debt and liabilities and only take the good assets of the business but it can be harder to complete an asset sale because the owner that is selling the business probably would not want to be responsible for the debts when the owner is not receiving any regular cash flow every month the purchase agreement will also discuss representations and warranties to ensure the business is what the seller says the business is and that no lawsuits are pending against the business the purchase agreement is also important because in the exhibit section it lists all the contracts of the business that you are buying this is to ensure that you are aware of all the legal matters of the business when it's time for closing some of the countries that you will need to sign will include the purchase agreement employment contracts non solicitation and non-compete contracts loan agreement with the lender seller note agreement with the seller stock purchase agreements for both you and any investors you have to help you raise money and any employment contracts between the new legal entity and yourself once you have bought the business you typically want to have an exit strategy as well you can do many things such as sell it to a larger business grow it and place it on the stock market through an initial public offering or make it a family business and pass it on to the next generation it is important to know that starting a business is not the only way to be an entrepreneur because you can buy a business you can use many paths to gather the money to buy a business particularly if you're willing to buy a business at three million dollars or less many of these paths include seller financing SBA loans and raise the money from investors and friends and family you can even combine these options to gather the entire loan amount so chase your dreams never give up because it's very possible with the right plan and legal strategies I came in game [Music]