Business Purchase Agreement Generator

Establish clear terms for buying or selling a business with appropriate representations, warranties, and transition provisions.

What is a Business Purchase Agreement?

A Business Purchase Agreement is a contract between a buyer and seller that outlines the terms and conditions for the purchase and sale of a business. This agreement establishes the purchase price, payment terms, assets and liabilities included in the sale, representations and warranties, closing conditions, and post-closing obligations.

Key Sections Typically Included:

  • Identification of Parties and Business
  • Transaction Structure (Asset vs. Stock Sale)
  • Purchase Price and Payment Terms
  • Earnout Provisions
  • Assets and Liabilities Included/Excluded
  • Inventory and Accounts Receivable Treatment
  • Seller's Representations and Warranties
  • Buyer's Representations and Warranties
  • Due Diligence Period and Process
  • Conditions for Closing
  • Non-Compete and Non-Solicitation Clauses
  • Transition Services and Training
  • Employee and Benefit Plan Matters
  • Indemnification Provisions
  • Confidentiality Requirements
  • Governing Law and Dispute Resolution

Why Use Our Generator?

Our Business Purchase Agreement generator helps buyers and sellers create a comprehensive document that clearly establishes the terms for transferring business ownership. By defining the scope of the transaction and addressing contingencies upfront, both parties can proceed with greater certainty and reduced risk of disputes during and after the closing.

Frequently Asked Questions

  • Q: How should the purchase price structure be addressed?

    • A: The agreement should clearly specify the total purchase price, the allocation between different asset classes for tax purposes, and the payment structure (lump sum, installments, seller financing, earnout provisions). It should address any adjustments based on working capital, inventory valuation, or other factors at closing, specify the required deposits and their refundability conditions, and outline the escrow arrangements for holdbacks. The agreement should also detail the timing and methods for post-closing price adjustments and establish clear procedures for resolving disagreements about purchase price calculations.
  • Q: What representations and warranties should be included?

    • A: The agreement should include comprehensive seller representations about business operations, financial statements, undisclosed liabilities, compliance with laws, tax matters, material contracts, intellectual property, employee matters, customer and supplier relationships, and pending litigation. It should specify the survival period for different categories of representations, address materiality and knowledge qualifiers, and establish the disclosure schedule process. The agreement should also include buyer representations regarding authority to enter the agreement, sufficient funding, and any regulatory approvals needed, and should outline the remedies available for breaches of representations including indemnification caps, baskets, and exclusions.
  • Q: How should post-closing obligations be structured?

    • A: The agreement should outline any transition services the seller will provide after closing (including duration, scope, and compensation), detail the seller's training obligations for the buyer and/or employees, and address customer and supplier relationship transfers. It should specify post-closing covenant provisions including non-compete terms (geographic scope, duration, prohibited activities), non-solicitation provisions for employees and customers, and confidentiality obligations. The agreement should also establish clear protocols for handling accounts receivable collected after closing, address post-closing tax matters and allocations, and outline the process for resolving post-closing disputes including whether mediation or arbitration is required before litigation.