Startup Junction

Purchase & Sales Agreement

The pruchase and sales agreement is a binding agreement between a buyer and a seller, which is executed once all the terms and conditions have been agreed upon and met. It is very important to have an attoreny and a CPA review this document before signing on the dotted line. Your Purchase & Sales agreement should have the following items listed on them:

1. Names of Seller, Buyer, and Business

2. Business Assets in Transaction (please include everything which is being sold)

3. Purchase price and Allocation of Assets

4. Covenant Not to Compete (so that seller doesn't just turn around and starts competing with you)

5. Payment Terms

6. Terms of Handoff (i.e. Seller will train buyer and will support for so long after the sale)

7. Inventories, Plant & Equipment

8. Contingencies

9. Fees (who will pay all the fees to lawyers, accountants and brokers)

10. Closing Date and who will facilitate it (Notary, Escrow or an Attorney)

Final Checklist Before Closing

1. Adjust Purchase Price — Any pro-ratings for items such a lease, inventory etc. Usually done by a CPA.

2. Seller Document Reviews - Usually done by an attorney.

3. Signing Promissory Note — If you are not taking over seller's loans. Usually done by an attorney.

4. Security Agreements — Assets which will be used as collateral for a business loan. Done by your lawyer and banker.

5. UCC Financing Statements — Done by your attorney.

6. Lease Ownership — Done by your attorney and real estate broker.

7. Vehicles — Done by your attorney.

8. Bill of Sale — Done by your attorney and CPA.

9. Patents,Ttrademarks, and Copyrights — Done by your attorney.

10. Franchise Agreements — Done by your attorney and the franchisor.

11. Closing or Settlement Sheet — Done by your attorney.

12. Consultation/Employment Agreement — Done by your attorney.

13. Complete IRS Form 8594 (PDF file), Asset Acquisition Statement — Done by your attorney and or CPA.