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Tag: Standard Asset Purchase Agreement
Simply put, you can’t buy or sell a business without a contract. A sales agreement for buying a business is necessary for keeping both the parties on the same page and avoiding any legal trouble. On the other hand, not having one can land you in legal troubles that can harm you in the long run.
We are here to understand the importance of a business purchase and sales agreement.
- Prevention of Miscommunication
A smooth deal can go wrong even with a slight miscommunication. To prevent any miscommunications, a small business purchase and sale agreement plays a pivotal role. There is nothing better than having an agreement in place even if the relationship between you and the other party are great. There is no chance of miscommunication since everything is present in clear, written terms. Help avoid future conflicts by putting together a comprehensive purchase and sale agreement.
- Provides Legal Support
Protection of both the parties is necessary in case any legal action. An agreement helps the court check and verify the terms and the validity of the contract, if the need arises. This helps legal authorities with taking necessary action. With the presence of the required agreement, there is always a legal backup for both sides. The terms of the agreement governs the transaction and the future interpretation by the parties should conflict arise or a change in management be desired.
- Provides Details
A sales agreement for buying a business ensures proper implementation and execution of the contract. It contains all the terms & conditions that are associated with the contract and keeps both parties informed. This document is used as a reference to obtain clarity on different terms. Also, this document is helpful in facing legal disputes, if any.
If you are planning to buy or sell a business, then you need to get the respective agreement framed. For that, you can seek help from the lawyers at the Law Firm of Vaughn, Weber & Prakope, PLLC. Make the whole legal process easier for yourself by using our legal services. Seek guidance today.
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Asset Purchase Agreements: Errors You Cannot Afford To Commit
Important Details to Include in a Standard Asset Purchase Agreement
Commercial transactions often involve an asset purchase agreement (“APA”) that is vital to business activity. But there can be a few conditions that make things go wrong.
Drafting of a simple asset purchase agreement is essential for the successful execution of the deal.
Below are the errors to avoid or else they can cost you dearly:
- Essential Parties are Excluded from APA
There may be a case when a buyer signs an APA with company X, while the actual owner is company Y or a shareholder in company X. The same can happen with the seller also. To avoid this, make sure that only the essential and real parties are a part of the deal.
- Failure to Address the Pre-conditions to the Deal
Failing to make sure pre-conditions are resolved before the completion of the transaction can increase the complexity of the deal. These conditions are clearance of the seller’s debts, third party consents, transfer of key employees, banking approvals, and approvals from other authorities.
- What are “The Assets” that you are purchasing?
IYou want to make sure that you identify each and every asset that you are purchasing. Some assets can be tangible (e.g., refrigerators, soda machines, furnishings) or intangible (e.g., business name, lease). You should determine which assets are owned or leased. You should inspect the tangible assets to make sure that they are in working order. For the assets that you are purchasing, you want to make sure that the seller actually has ownership of them and has the right to transfer them to you. With the leased equipment, you need to decide if you want to (and can) assume the lease and, if so, what are the terms of the lease.
- No Specifications about Closing Requirements
All actions to be taken, and all documents to be provided at closing, should be clearly identified by the standard asset purchase agreement. Failure to specify such conditions makes it difficult for both parties in the long run.
- Failure to Change Signatories
Generally, buyers don’t feel the need to change the signatories to banking and other business accounts. But it is essential to keep third parties informed at the right time about such changes.
With the Law Firm of Vaughn, Weber & Prakope, PLLC, you will always be able to make the right legal decisions when it comes to the formation of LLC asset purchase agreements. Contact us to get the most appropriate legal guidance from lawyers with extensive knowledge gained over years of experience.
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Buying and Selling a Small Business
Important Details to Include in a Standard Asset Purchase Agreement
Our previous post detailed the importance of the contract in a Standard Asset Purchase Agreement. Wise attorneys advise business owners to create a contract outlining all the details of the agreement. The purpose of creating a contract is to make sure both the buyer and seller protect their respective rights.
But today’s post is to educate you about the importance of including certain details in a contract. These essential pieces of a contract play a crucial role in a Standard Asset Purchase Agreement.
Types of Assets?
This is something anyone planning to buy or sell a business should know. Different types of assets are valuated differently and including these types are an essential part of any contract. It is the part of a contract that contains crystal clear descriptions and disbursements of all assets mentioned in the agreement.
Intangible assets:
The list of intangible assets described in a contract are good will, names of customers, various contact information for vendors, plus anything personal being transferred. All this information is included in a Standard Asset Purchase Agreement. It is important to discuss the valuation of these assets and how to account for them with financial professionals including a CPA with business valuation experience
Tangible assets:
The list of tangible assets could include inventory, office furniture, telephone systems, computer systems and networks, tools, fixtures, printed materials, etc. A detailed description of these is mentioned and referred to separately on an exhibit or addendum attached to the Standard Asset Purchase Agreement. It is also important to discuss these assets with financial professionals including a CPA with business valuation experience.
In addition to this, you might also list details about the cost of these assets, as well as the terms related to the sale in the contract.
Our next post will be focused on educating you about the importance or role of Liabilities in a contract. This key information will help you make the right decisions about buying and selling a business correctly from a legal, as well as financial, point-of-view.
If you are buying a business or selling a business, the Law Firm of Vaughn, Weber & Prakope, PLLC would be more than happy to offer counsel. Our team is always available in Long Island, Suffolk County, Nassau County; throughout New York, and its five boroughs, to help you with your business.
Reach us anytime! Our doors are always open for you!
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The Role of Commercial Litigation Lawyers in Your Business
Key Things to Look For In Your Potential Business Litigation Attorney
Buying and selling a business requires the handling of several legalities. Simple Asset Transfer Agreement signing is one of those key legalities. Both buyer and seller sign this agreement for the following purposes:
- Transaction completion
- For transferring the ownership of an organization’s business operations into the buyer’s name.
- To help sellers transfer the ownership of a company’s assets into the buyer’s name.
- To ensure payment and security of the same for seller.
To get to closing, it is necessary to have knowledge about the structure of a Simple Asset Transfer Agreement including various things such as:
- The types of assets and liabilities involved in the sale.
- The payment structure for the sale.
- The ancillary documents required to be filed (i.e. deeds, lease extensions, tax forms, etc.).
The objective of this post is to explain to you the role of the Contract in a Simple Asset Transfer Agreement.
Contracts:
Contract creation is important for selling even a portion of your company’s assets. The creation of a contract, outlining all the details related to the agreement, is recommended. This contract sets the terms for the buyer and seller and delegates their respective rights and obligations relating to the impending transaction.
Remember, preparing and signing a contract is a complex process. This process should only be performed by an experienced lawyer for a simple asset transfer agreement. We at the Law Firm of Vaughn, Weber & Prakope, PLLC can make the difference. Our team of experienced lawyers can make it easy for you to prepare a legally correct Simple Asset Transfer Agreement. Contact us at (516) 858-2620 to discuss what we can do for you.
