Agreement of Purchase and Sale of Business Assets Page 4 of 5 6. Deb, Five Tips for Keeping Track of Contract Versions, Battle of the Forms Explained (Using a Few Short Words), Electronic Confidential Information: It's Indestructible, The Law of Stuff Isn’t the Same As the Law of Services. This agreement may be signed in any number of counterparts, each of which will be an original with the same effect as if the signatures were upon the same instrument, and it may be signed electronically. In fact, many people refer to the document as a 'bill of sale contract'. I drafted it with very small businesses in mind. Attention: _____. A bill of sale is a legal document that records the transfer of ownership of an asset to a second party in exchange for money. Each of the undersigned has caused this bill of sale and assignment and assumption agreement to be duly executed and delivered as of the date first written above. It is different from a stock purchase agreement (SPA) where company shares, including title to the assets and liabilities, are being bought/sold. In a sale of the assets the original business structure and ownership would remain intact however title to assets such as equipment, inventory, goodwill, and business contracts would transfer to the new purchaser. A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. Goodwill $_____. Form Purchase Agreement And Bill Of Sale 03/28/2012 3 Section 6. The seller can also choose to make certain … A bill of sale has been defined as a legal document made by the seller to a purchaser, reporting that on a specific date at a specific locality and for a particular sum of money or other value received, the seller sold to the purchaser a specific item of personal property, or parcel of real property of which he had lawful possession . A bill of sale is used to reduce the risk of fraud associated with a private sale. In an asset sale, only the asset of the business are transferred to the new owner without a transfer of ownership of the actual business entity. A benefit of an asset sale is that it allows the parties significant flexibility as to what assets and liabilities are included in the transaction. Though this article has used the term “stock sale” to describe the primary alternative to an asset sale, it should be noted that another common M&A transaction structure, a merger, provides another alternative. i) the “Inventory,” as set forth on Exhibit A to this Schedule 1, all of which must be new re-sellable quality and not old stock, discontinued, or outdated materials. A Bill of Sale documents a transfer of property and often an exchange of money. We need a Purchase agreement and bill of sale drafted. Determination of Capital Gain Taxability in case of Asset Purchase. In the event of a default on the purchase agreement, this … The agreement may be as simple as giving the buyer a bill of sale. Due to the greater risk to the buyer when purchasing the shares of the company, rather than the assets, the buyer will generally require a greater number of warranties from the seller, which will result in a more extensive and complicated sale and purchase agreement. A. We use analytics cookies to help us understand how users interact with our sites, such as identifying the most popular content. Sale of the Purchased Assets; Assumption of the Assumed Contracts. In a stock deal, instead of choosing specific assets and liabilities to acquire, the buyer purchases an ownership stake in the entire business. The financial information the Seller provided to the Buyer is accurate, correct, and complete, is in accordance with the books and records of the Seller, and presents fairly the results of operation and financial condition of the Seller’s Business. The captions in this agreement are included for convenience of reference only and will be ignored in the construction or interpretation hereof. In addition to an asset purchase agreement, other ancillary agreements will be required to transfer the assets from the seller to the buyer. Trade-in Mode:The Buyer agrees to pay 1210 (US Dollars) and trade-in their veh… 2. Further Actions. At the Closing and subject to the terms and conditions of this Agreement, other than the Excluded Assets, Seller shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase from Seller, all rights, title, and interest in and to all assets of every description, The bill of sale touches on physical tangible assets which are private in nature. Litigation. A stock sale is often favored by the owners of a selling company because, in general, all of the known and unknown liabilities of the business are transferred to the buyer, and therefore the sellers avoid ongoing exposure to such liabilities (other than as expressly agreed with the buyer). This bill of sale and assignment and assumption agreement is entered into on _____, 20__, between _____, a [STATE] [CORPORATION/LIMITED LIABILITY COMPANY] (the “Buyer”), and _____, a [STATE] [CORPORATION/LIMITED LIABILITY COMPANY] (the “Seller”), which is owned by _____ (the “Owner”). Assignment. TRANSFER OF ASSETS 1.1 Sale of Assets. If you are considering a significant M&A transaction, whether as the potential buyer or seller, you should consult with your legal counsel and tax and accounting advisors early in the process to avoid potential delays and unnecessary expense. The Buyer, Roberts, and Group. There are no claims or suits pending or, to the Seller’s knowledge, threatened by or against the Seller (1) relating to or affecting the Business or Purchased Assets or (2) by or against any employee of the Seller relating to or affecting the Business or Purchased Assets. Buyers often resist a stock sale transaction unless the company to be acquired has a clean operating history or there are significant practical difficulties in completing an asset sale, such as restrictions on the transfer of certain assets from the selling company to the buyer or burdensome third party consents needed to transfer the assets. The Seller and the Owner each covenants and agrees that neither the Seller nor the Owner will: (1) for a period of ___ years following the Effective Time own, manage, or be employed by (whether as an employee or independent contractor) a competing business within ___ miles of the Business; (2) or for a period of ___ years following the Effective Date recruit or employ (whether as an employee or independent contractor) any of the Business’s current employees or independent contractors. All monies required to be withheld by the Seller from employees for income taxes and social security and other payroll taxes have been collected or withheld and either paid to the respective governmental bodies or set aside in accounts for such purpose. 4101 Lake Boone Trail, Suite 300 Raleigh, NC 27607.7506. The buyer may choose which assets he wishes to buy and which liabilities he does not wish to have. ABC Corp enters into a purchase and sale agreement to sell all of its assets to BuyCo, Inc., for $10 million. 2) The Parties. The Buyer does not assume any liability under the Assumed Contracts arising before the Effective Time. When the time comes to draft the definitive purchase agreement, there will be significant differences in the agreement depending on the type of transaction structure agreed upon by the buyer and the seller. Promissory Note, Security Agreement (if the seller is financing the sale, asset sale) – This document is required for asset sales or if seller financing is involved. An asset sale is the purchase of individual assets and liabilities, whereas a stock sale is the purchase of the owner’s shares of a corporation. While there are many considerations when negotiating the type of transaction, tax implications and potential liabilities are the primary concerns. If any date provided for in this agreement falls on a day which is not a business day, the date provided for will be deemed to refer to the next business day. Definition of APA An asset purchase agreement (APA) is a contract used to purchase company assets, such as intellectual property, machinery, property, customer lists, contracts, etc. 1. No Other Assumption of Liabilities. This agreement may not be modified or amended except by a writing signed by the parties. Attention: _____, If to the Buyer: Although assets are considered as groups of properties, it is not required for the purchaser to buy every single asset of the company. 7. A Stock Sale or a Business Purchase, meanwhile, is the buying of the owner’s share of a corporation. Real Estate Purchase Contract PDF. Here’s the text of the document. A purchase or sale agreement, on the other hand, deals with stock rather than private property. 5. The Seller and the Owner, jointly and severally, represent and warrant to the Buyer that all of the representations and warranties set forth on Schedule 4 are true and correct in all respects as of the date of this agreement. WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of Download DOC/PDF It’s structured as a bill of sale and assumption agreement to make it easy for do-it-yourselfers to use (in many cases there’ll be no need for a separate bill of sale, it doesn’t require closing certificates, and it’s otherwise largely a fill-in-the-blank document). It only expresses an intention to purchase the listed stocks but is not legally binding. These might include a bill of sale, assignment and assumption agreements, intellectual property assignments and corporate name change filings, as well as agreements providing for the hiring of the employees of the business by the buyer. In addition to an asset purchase agreement, other ancillary agreements will be required to transfer the assets from the seller to the buyer. Whereas a Purchase Agreement is usually made before money is exchanged and it includes specific requirements both the seller and the buyer must meet before the property ownership is transferred. A. A bill of sale is a legal document that records the transfer of ownership of an asset to a second party in exchange for money. (e) Entire Agreement.This Bill of Sale, Assignment and Assumption Agreement, the Asset Purchase Agreement, the Registration Rights Agreement and the Seller Non-Competition Agreement, together set forth the entire understanding of the Parties, and supersede all other agreements and understandings between the Parties, relating to the subject matter hereof and thereof. Each party extra flexibility before finishing the settlement by arranging terms to … Yes or amended except by a signed... 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