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There are a number of reasons why a business owner may decide to sell a business. A business owner may, for instance, have made a huge success out of their business and by selling it they can move on to their next great idea with funding already in hand. Alternatively, a business owner might not have the skills it takes to properly manage the business and increase sales, thus making a decision to sell before customers stop buying the product or service. Business owners have a lot of options when it comes to selling part or all of their business. The one thing all business owners need when they decide to sell is a sale of business agreement. A sale of business agreement is a legal document signed by the current business owner (whether a company or individual) and the individual or company that has decided to buy the business. The agreement contains many of the details necessary to properly execute the sale, such as a list of the assets that are included in the sale, when the sale will take place and terms relating to the closing of the sale. Generally, the bulk of the work in drafting this type of agreement will falls on the current owner. The owner must decide what assets are to be included in the sale. If there is additional property or equipment that the owner wants to keep, this can be outlined in the agreement as an exclusion. Buyers of a business must carefully read the sale of business agreement in order to know what they are getting for the price. Most business sales do not include things such as cash on hand or any cash contained in business-owned bank accounts. However, if the business and its products or services include patents, licenses and agreements with manufacturers, these can be included with the sale of the business unless any of it is listed as an exclusion on the agreement. A sale of business agreement may go through multiple drafts depending on how negotiations take place between the buyer and seller. It is important for both sides of the transaction to keep good records so that each party knows what is being sold, what is being excluded from the transaction and the details of the payment terms. Once everything is agreed upon, the sale agreement can be signed and transfer of the business can take place once the payment is in hand. Selling a business can be a complicated process, but as long as both parties have good legal services counsel to guide them, the sale can be complete quickly and efficiently.
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