Use a Memorandum of Agreement for Transfer of Business to create clear, enforceable terms for asset and liability transfer, reduce closing uncertainty, document transitional responsibilities, and provide a record for regulatory, tax, and employee-related compliance. It streamlines integration planning.
Professionals who prepare or approve transfers—buyers, sellers, corporate counsel, and advisors—use this memorandum to outline obligations and preserve evidence of agreed terms.
An owner or majority shareholder preparing to transfer a business needs to document which assets and contracts convey, allocate tax liabilities, establish employee handling, and set escrow or holdback terms; this protects against post-closing disputes and supports tax and regulatory reporting obligations.
A purchaser or investor requires clear warranties, representations, indemnities, and a list of excluded liabilities; the memorandum helps conduct due diligence, confirms agreed consideration, and defines closing conditions and transition responsibilities to reduce integration risk.
| Field | Configuration |
|---|---|
| Signature Order | Set signer sequence or parallel signing. |
| Authentication Level | Choose email, SMS code, or KBA. |
| Reminder Schedule | Set automatic reminders and escalation. |
| File Retention | Define storage, export format, and retention. |
Consider how documents will be delivered, signed, and archived when choosing platforms and integrations.
Provide a comprehensive schedule identifying physical property, intellectual property, contracts, permits, inventory, and accounts receivable, with unique identifiers and any exclusions to avoid post-closing ambiguity, and state any liens or encumbrances, transfer mechanics, and valuation methods for inventory and receivables.
List each contract proposed for assignment, state required consents, note termination clauses, and indicate whether novation or assignment will occur to ensure enforceability; attach copies and note cure obligations or indemnities required by counterparties.
Describe cash payments, stock, assumption of liabilities, or staged payments; include escrow provisions, holdbacks, formulae for adjustments such as working capital true-ups, and include currency, payment account, and set-off rights plus tax gross-up responsibilities where applicable.
State seller representations on title, compliance, financial statements, and pending litigation; define survival periods and remedies for breach, including indemnity caps and baskets, and clarify knowledge qualifiers, materiality thresholds, and remedies timetable for breach notifications and cure periods.
Address transfer of employment, benefit continuation, accrued payroll obligations, and required notices; specify which party bears severance or benefit liabilities and state obligations for COBRA, benefit plan assignments, and accrued PTO payouts with timing.
List conditions precedent such as regulatory approvals, consents, financing, and absence of material adverse change; include timelines for satisfaction and termination rights, specify deliverables at closing, escrow release triggers, and post-closing covenant timelines.
Attach asset schedules, excluded assets, assigned contracts list, and detailed inventory; each schedule should reference numbered items and, where applicable, exhibit numbers for cross-reference in closing.
Include copies of material contracts, permits, IP assignments, and financial statements as exhibits; ensure redactions are noted and originals are available at closing for auditor review.
Provide individual signature blocks for each party with printed name, title, capacity (e.g., authorized signatory), and date lines; include corporate attestation language if applicable and notary acknowledgment where required.
List required closing items such as bills of sale, assignments, releases, tax clearance certificates, and proof of payment; specify delivery method and escrow instructions, and contact for wire instructions.
Agree on scope, price, and general terms.
Complete audits, consents, and title verifications.
Execute memorandum, obtain signatures, and notarizations.
Exchange funds, assignments, and delivery of closing deliverables.
File required forms and report asset sales per IRS rules.
Retain I-9s per 8 CFR and update payroll records promptly.
Submit transfers for professional licenses and permits when required by state agencies.
Provide timely assignment or novation notices per contract notice periods.
File UCC-1s and record deeds where required to perfect security interests.
| Criteria | Memorandum | Asset Purchase Agreement |
|---|---|---|
| Formality | less formal | comprehensive, negotiable |
| Structure | summary of key terms | full contractual obligations |
| Use case | interim roadmap | definitive transfer and assignments |
| Signing parties | key parties only | multiple executing parties, escrows |
| signNow | DocuSign | Adobe Sign | PandaDoc | HelloSign | |
|---|---|---|---|---|---|
| Starting Price | $8/user/mo | $15/user/mo | $14/user/mo | $19/user/mo | $15/user/mo |
| Free Trial | 7-day free trial | Varies | Varies | Varies | Varies |
| Bulk Send | Yes | Yes | Yes | Yes | No |
| Audit Trail | Yes | Yes | Yes | Yes | Yes |
| HIPAA Compliant | Yes | Yes | Yes | No | No |
| Envelope Cap | No envelope cap | 100 envelopes/user/year | Varies | Varies | Varies |