Free Business Purchase Agreement Template

A business purchase agreement is a legal contract used to document the sale of a business or specific business assets. It outlines what’s being sold, who’s involved, the price, and how the sale will work.

You can use this agreement to:

• Sell or buy an entire business
• Transfer specific assets, like inventory or equipment
• Set clear expectations for payment and timing
• Avoid misunderstandings about liabilities or responsibilities

This document helps both parties move forward with confidence. It’s especially useful when selling an LLC, corporation, partnership, franchise, or small business. Whether you’re buying or selling, a signed agreement protects your interests and keeps the deal organized.

A complete agreement helps avoid confusion and protects everyone involved. Here’s what to include:

• Buyer and seller details: Include the full names and contact information of all individuals or entities.
• Business details: Add the business name, address, and type (LLC, sole proprietorship, etc.).
• Assets included in the sale: List everything being transferred, such as inventory, contracts, licenses, or goodwill.
• Excluded assets: Clearly state what’s not part of the sale.
• Assumed liabilities: Outline what debts or obligations the buyer is taking on.
• Purchase price: State the full amount and how it’s paid (in full, with a deposit, or in installments).
• Payment terms: Include the timeline and method of payment, and whether interest applies.
• Price allocation: Break down how the price is divided among assets (for tax purposes).
• Closing date: Specify when the business officially changes hands.
• Adjustments at closing: Note any final cost adjustments, like prorated taxes or expenses.
• Warranties and representations: Add legally binding statements about the business’s condition.
• Conditions or covenants: Include promises made before or after closing, such as required inspections or confidentiality.
• Non-compete or non-solicit clause: Optional clauses to protect the buyer after the sale.

Writing a business purchase agreement doesn’t have to be complicated. A well-written agreement protects both the buyer and seller, prevents misunderstandings, and keeps the deal on track. You can use the Document Genius template to simplify the process—just customize the details, download, and sign.

1. Add Buyer, Seller, and Business Information

Start with the full legal names and contact information of both parties. Include the business’s name, address, and legal structure (LLC, corporation, etc.).

Example: “Seller: Ava Patel | Buyer: Daniel Lin | Business: Pixel Prints LLC, 321 Market St, Austin, TX 78701”

2. Describe What’s Being Sold

Specify whether you’re selling the entire business or only selected assets. Use exhibits or checklists to detail:

• Inventory
• Equipment
• Licenses and permits
• Contracts
• Goodwill

You can also list excluded assets in a separate section or appendix.

3. Clarify Liabilities

State whether the buyer will take on any debts or obligations, such as:

• Accounts payable
• Unpaid taxes
• Employee-related expenses

If some liabilities are excluded, be clear about who remains responsible.

4. Set the Purchase Price and Payment Method

List the total sale price. Then explain how the buyer will pay:

• Full amount upfront
• Partial payment with a deposit
• Scheduled installments (with or without interest)

Include key dates and any escrow arrangements if needed.

5. Allocate the Purchase Price

Break down the price into categories like equipment, inventory, or goodwill. This allocation matters for tax purposes and should follow IRS Section 1060 rules.

6. Include Closing and Adjustment Terms

Specify the closing date when the transfer takes effect. Include any adjustments, such as prorated utilities or taxes, to balance costs between buyer and seller fairly.

7. Add Representations and Warranties

These are promises about the business’s condition. Each party should confirm facts like:

• Ownership of assets
• Accuracy of financial records
• Tax compliance

False statements may allow the other party to cancel the deal or seek damages.

8. Include Any Covenants or Conditions

Add any commitments made before or after closing. Examples include:

• Buyer’s right to inspect financials
• Seller continuing normal operations
• Buyer securing financing before the sale finalizes

9. Add Extra Clauses (Optional)

Strengthen your agreement with protections like:

• Non-compete clauses: Prevents the seller from opening a competing business nearby
• Non-solicitation clauses: Stops the seller from poaching clients or employees
• Confidentiality agreements: Keeps sensitive business details private after the sale

The length of time allowed for each clause can vary depending on local regulations, the nature of the business, and the information being protected. Overly broad or lengthy clauses can be deemed unenforceable.

10. Finalize and Sign the Agreement

Both parties should sign and date the agreement.
To strengthen enforceability, consider:

• Notarizing the document
• Including exhibits (asset list, liabilities, payment schedule)
• Providing each party with a signed copy

It depends on the agreement. If both parties haven’t signed yet, the buyer can walk away. But once signed, the buyer may only cancel if a termination clause applies or if conditions (like financing) aren’t met. Backing out without cause may lead to losing a deposit or legal consequences.

Not directly. A purchase agreement is tied to a specific deal between a buyer and seller. However, if the agreement allows it, the buyer may assign their rights to another party before closing. This requires consent from all parties and is typically covered in the contract language.