Small Business Sale Agreement Template for United States

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Key Requirements PROMPT example:

Small Business Sale Agreement

"I need a Small Business Sale Agreement for selling my family-owned restaurant in California, including all kitchen equipment and recipes, with a planned closing date of March 15, 2025, and I want to include a 2-year non-compete clause for the local area."

Document background
The Small Business Sale Agreement is a crucial document used when transferring ownership of a small business in the United States. It's particularly relevant for transactions involving businesses with annual revenues typically under $5 million. This agreement covers all aspects of the sale, including asset transfer, employee transitions, intellectual property rights, and ongoing obligations. It must comply with both federal regulations and state-specific business transfer laws. The document is essential for protecting both parties' interests and ensuring a smooth ownership transition. It's commonly used in situations ranging from retirement sales to strategic acquisitions.
Suggested Sections

1. Parties: Identification and details of the buyer and seller

2. Background: Context of the sale and brief description of the business

3. Definitions: Key terms used throughout the agreement

4. Purchase Price and Payment Terms: Details of consideration and payment structure

5. Assets/Shares Being Sold: Specific description of what is being transferred

6. Closing Conditions: Requirements that must be met before sale completion

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Covenants: Ongoing promises and obligations of the parties

9. Indemnification: Protection against losses and liabilities

10. Termination: Circumstances under which the agreement can be terminated

11. General Provisions: Miscellaneous legal provisions including governing law, notices, and amendments

Optional Sections

1. Employee Matters: Terms regarding staff transition and employment arrangements - used when employees are being transferred with the business

2. Intellectual Property: Terms regarding IP transfer and protection - used when the business owns significant IP assets

3. Real Estate: Terms regarding property transfer - used when real estate is included in the sale

4. Environmental Matters: Environmental compliance and liabilities - used when the business has potential environmental impacts

5. Non-Competition: Restrictions on seller's future business activities - used when protecting the business's competitive position is crucial

Suggested Schedules

1. Schedule A - Asset Schedule: Detailed list of all assets included in the sale

2. Schedule B - Inventory List: Current inventory being transferred

3. Schedule C - Equipment List: Detailed list of equipment included in sale

4. Schedule D - Contracts Schedule: List of contracts being assigned/transferred

5. Schedule E - Employee Schedule: List of employees and their key terms of employment

6. Schedule F - Intellectual Property Schedule: List of all IP assets being transferred

7. Schedule G - Due Diligence Checklist: Comprehensive list of documents reviewed

8. Schedule H - Assumed Liabilities: Detailed list of liabilities being assumed by the buyer

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Clauses
Industries

Securities Exchange Act: Federal law governing the sale and transfer of securities, relevant if the business sale involves stock transfers

Internal Revenue Code: Federal tax regulations affecting business sales, including capital gains, asset depreciation, and tax liabilities

Uniform Commercial Code: Standardized state laws governing commercial transactions, including sale of goods and secured transactions

Federal Trade Commission Act: Regulates fair competition and consumer protection in business transactions

Hart-Scott-Rodino Act: Antitrust legislation requiring review of large business transactions to prevent monopolistic practices

Federal Employment Laws: Including FLSA, FMLA, and other regulations affecting employee rights and transitions during business sales

State Corporation Laws: State-specific regulations governing corporate entities and their transfer or dissolution

State Business Transfer Laws: State-specific requirements for transferring business ownership and assets

State Bulk Sales Laws: Regulations protecting creditors in bulk transfers of business inventory and assets

State Fraudulent Transfer Acts: Laws preventing the fraudulent transfer of assets to avoid creditor obligations

State Licensing Requirements: Regulations governing the transfer or reissuance of business licenses and permits

Due Diligence Requirements: Legal standards for investigating and verifying business assets, liabilities, and operations before purchase

Successor Liability Laws: Regulations determining buyer's responsibility for seller's pre-existing liabilities

Intellectual Property Transfer Rules: Laws governing the transfer of patents, trademarks, copyrights, and trade secrets

Environmental Regulations: Federal and state environmental compliance requirements affecting business transfers

Real Property Transfer Laws: Regulations governing the transfer of real estate assets in business sales

Franchise Laws: Special regulations applying to the sale of franchised businesses

Local Business Regulations: Municipal and county-level requirements affecting business transfers and operations

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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