Business sale agreements

How to protect your business and its assets with a business sale agreement.

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Taking the time to negotiate the exact terms and conditions with the purchaser of your business will help you to avoid a host of potential issues in the future. As well as helping you secure the deal you're looking for, a legally-sound business sale agreement can protect you against liability issues, disputes and loss of assets.

Here's everything you need to know about a business sale agreement, including where to find a free template you can download.

What is a business sale agreement?

A business sale agreement is a legally binding document that sets out the terms and conditions by which a seller will sell their business and transfer assets to a buyer.

It is also known as a business sale contract, business purchase agreement, sale of business agreement and sale of business contract.

This type of agreement lists the conditions of the sale in detail, such as the selling price, list of included assets, and dispute resolutions.

business sale agreement template from Lawpath

Download this template at Lawpath

When should I use a business sale agreement?

If you are buying or selling a business or assets, then you'll need to negotiate a business sale agreement with the parties involved.

Before you can do this, it's sometimes recommended that you draft up a Heads of Agreement first.

Business sale agreement vs. a term sheet

Unlike a business sale agreement, a term sheet is a non-binding agreement. It outlines in bullet form the terms and conditions of the sale of business. It is the precursor to a business sale agreement and greatly assists a lawyer when drafting up the final legal document. It also helps the buyer and purchaser to commit to their original agreement of terms and conditions.

What's included in a business sale agreement?

A business sale agreement is a long and detailed document consisting of 34 pages divided into 21 sections and 10 schedules that the list the terms and conditions of the following:

  • Sale price
  • Terms and conditions of sale
  • Conduct of business before completion of the sale
  • List of shares and assets included: stock, training, employees, superannuation, contracts and equipment
  • Warranties and guarantees
  • A restraint clause
  • Goods and services tax (GST)
  • Confidentiality clauses
  • Dispute resolution terms and conditions.

How effective is a business sale agreement?

A business sale agreement is essential when it comes to the transfer of shares and assets. Without a business sale agreement, you'd have no legal ground to stand on and you run the risk of losing a lot of money and assets.

A business sale agreement needs to satisfy both party's terms and conditions in order to be effective.

Having a legally binding business sale agreement can help in many ways. It can:

  • Clearly identify the responsibilities of buyer and seller
  • Protect you from losing money
  • Ensure proper conduct in the transfer of assets, employees and premises
  • Reduce the risk of legal and liability issues.

Do I need a lawyer for a business sale agreement?

Legally you don't need to hire a lawyer to draft a business sale agreement, but it could be a big risk not to. With such an important and long and complex document, it could take a lawyer's expertise to put it together without error or omission.

Name Product Legal document services available Free legal documents available? Other legal services offered Price Document library size
Lawpath
Customisable document templates
You can view samples for free and you can create your first document for free.
Online document eSignatures, lawyer marketplace, on-demand legal advice, business setup services
$288 per year for unlimited documents
300+
Customise and download up to 300 legal documents for business or personal matters. Plus register a company, business name or ABN.
LawDepot
Customisable document templates
Free one week trial available which gives access to hundreds of documents.
Free legal articles and resources
$59.88 per year for unlimited documents or one-off documents available for $9.50 - $49
150+
Customise and download legal documents in as little as five minutes. Plus, LawDepot offers peace of mind with two service guarantees.
Legal123
Customisable document templates
No
Custom legal services available, free law change updates via email, legal packages for various professions
Individual templates start from $59 + GST
Legal123 offers a range of individual templates or document packages for consultants, app developers, personal trainers and more.
LegalVision
Customisable document templates & professionally drafted documents
No
Legal advice phone consultations, contract reviewing and amendments, trade mark applications, business structure assistance.
From $49 + GST per week for access to 40+ legal templates
40+
Take advantage of unlimited legal advice consultations, free legal templates and fast turnaround times for legal projects with LegalVision membership.
Law Central
Customisable document templates
You can view samples and create your own document for free with the Silver membership.
Legal advice specialised on commercial and estate planning
Between $18 - $625 per document.
~100
Law Central offers a large number of legal templates for super, trusts, estate planning, employment and commercial uses.
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How do I write a business sale agreement?

It helps if you start with a Heads of Agreement document that outlines the terms and conditions of the sale. This is a document you need to negotiate with the purchaser and it can save your lawyer a lot of time and you a lot of money.

Also, find a free template of a business sale agreement that you can download from the Internet and go over it with the purchaser. This can also help to cut down on extra time spent in a lawyer's office.

There are a number of free online templates available for business sale agreements and some that let you view the document before downloading. These include:

  • LawDepot. LawDepot offers hundreds of business and legal documents, free to download. All you do is fill them in online before downloading the documents straight to your computer.
  • Wonder.Legal. Choose from more than 140 legal document templates with an average fee of $22.96 to download. All you have to do is fill out a questionnaire and Wonder.Legal does the rest.
  • Lawpath. Lawpath is an online legal resource for small businesses and entrepreneurs. You can view samples of legal document templates for free, but a fee is required for access to downloads and customisable options.
  • LegalVision. For a monthly membership to LegalVision of $199, you'll get unlimited access to free downloads of legal document templates (includes the business sale agreement).

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