Organize details for the sale of business assets: Sale of Business Assets Worksheet
What is a Sale of Business Assets Worksheet?
When you're negotiating the terms of the sale of a business, a Sale of Business Asset Worksheet can help you outline all of the important details. It helps you understand the possible terms that might then be included in a formal legal document—the Business Purchase Agreement—that comes next. A Sale of Business Assets Worksheet helps determine the value of the assets, and what specifically will be considered assets. Any or all of the assets can be selected for purchase. Other terms of the sale are outlined in the Worksheet, too, like the anticipated closing date, non-compete clause, whether a letter of intent shall be used and what terms will be included, assumption of liabilities, and more. The use of a Sale of Business Assets Worksheet allows both buyer and seller an upfront, clear understanding of the terms of the sale, to help you put the right terms in a formal document. Note that this Worksheet helps with the sale of a business that's an individual asset: it's not for selling corporate stock, ownership units, or partnership interests.
When to use a Sale of Business Assets Worksheet:
- You are selling or buying the assets of a business.
- You want to explore a checklist of relevant sale terms to consider.
- You want to create a summary of the terms of the sale which can be incorporated into a sale of business assets form.
Sample Sale of Business Assets Worksheet
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SALE OF BUSINESS ASSETS WORKSHEET
Prepared on
The following information and terms will be incorporated into a Sale of Business Assets Agreement to be signed by the parties:
SELLER INFORMATION:
BUYER INFORMATION:
NAME OF BUSINESS TO BE SOLD:
| Trade Name | _________________________________________________ |
| Address | __________________________________________________ |
| _________________________________, ______ __________ |
| Phone | ____________________ |
| Type: | ( ) Sole Proprietorship |
| ( ) Partnership |
| ( ) Corporation |
| ( ) Limited Liability Company |
| ( ) Other: _______________________ |
Primary Product/Service: __________________________________________
Primary Location: _______________________________________________
___________________________________________________
Worksheet Key
[ ] Check none, some, or all options (boxes) that apply.
( ) Select only one option.
___________________________________________________
| [ ] 1. LETTER OF INTENT. In advance of signing the Sale of Business Assets Agreement, Buyer and Seller will cooperate in preparing and signing a non-binding Letter of Intent with regard to the proposed sale. |
| [ ] Stand-Still Provision. The Letter of Intent will include a provision prohibiting Seller from initiating or carrying on negotiations for the sale of the assets or the business with any party other than Buyer unless either (1) Buyer and Seller fail to enter into a binding Sale of Business Assets Agreement by __________, or (2) Buyer and Seller agree in writing to abandon the Letter of Intent. |
| [ ] Confidentiality Provision. The Letter of Intent will include a provision requiring Buyer to keep confidential the information received from Seller and to return such materials to Seller after a reasonable period of inspection. |
| 2. SALE OF ASSETS. On the closing date, Seller will sell to Buyer the following assets: |
[ ] Cash. Cash and cash accounts
[ ] including ____________________________________________
[ ] Real Estate. All of the real property and improvements described
option 1: ( ) as follows: ___________________________________
option 2: ( ) on the attached Exhibit A.
[ ] Accounts Receivable.
option 1: ( ) All of Seller's accounts receivable.
option 2: ( ) All accounts receivable described on the attached Exhibit B.
[ ] Equipment.
| option 1: ( ) All rolling stock, machinery, equipment, vehicles (licensed and not licensed), office equipment, computer hardware and software, tools, supplies, parts, furniture, fixtures, and all other assets of a similar character owned by Seller and used in the business |
[ ] including, but not limited to, the property listed on the attached Exhibit C.
[ ] excluding those items retained by Seller as listed on the attached Exhibit D.
option 2: ( ) All items listed on the attached Exhibit C.
[ ] Inventory.
option 1: ( ) All inventory held as of the closing date.
option 2: ( ) All inventory items listed on the attached Exhibit E.
[ ] Contracts.
option 1: ( ) All of Seller's contracts
[ ] including leases.
[ ] including those described on the attached Exhibit F.
option 2: ( ) Those contracts listed on the attached Exhibit F.
[ ] Miscellaneous Assets.
| option 1: ( ) All other assets or properties of Seller relating to the business and in existence on the closing date, including |
[ ] telephone numbers and telephone directory listings and advertising
[ ] customer lists
[ ] sales and purchase records
[ ] office records
[ ] all drawings
[ ] franchises
[ ] licenses, permits, other rights granted by governmental agencies
[ ] trademarks, trade names, logos
[ ] copyrights
[ ] patents
[ ] goodwill
[ ] know-how, processes
[ ] supplies
[ ] other: ___________________________________
option 2: ( ) All assets listed on the attached Exhibit G.
[ ] Other: _________________________________________________
3. PURCHASE PRICE. Buyer will pay $ ________ for the assets
| [ ] | of which $ ________ will be paid as earnest money, to be held by _______________ (name) of _______________ (address) (the "escrow agent"), to be applied to the purchase price at the closing, otherwise to be returned to Buyer if the transaction fails to close due to no fault of Buyer, and the balance of _______________ to be paid as follows: |
| option 1: ( ) in cash at the closing. |
| option 2: ( ) $ ________ will be paid in cash at the closing, and $ ________ will be given in the form of a Promissory Note payable to Seller, providing for |
| option 2a: ( ) monthly (payable on the ________day of each month) payments of principal and _____% interest |
| option 2b: ( ) | other: ________________________________ |
| option 2c: ( ) | until paid in full. |
| option 2d: ( ) | until paid in full, but with the entire amount due and payable as a balloon payment on __________. |
| option 3: ( ) _______________(e.g. annual) (payable on the ________________day of each period) payments of principal and _____% interest |
| option 3a: ( ) | until paid in full. |
| option 3b: ( ) | until paid in full, but with the entire amount due and payable as a balloon payment on ____________. |
[ ] The Note will be secured by
[ ] a mortgage on the real estate.
[ ] a security agreement and related notice instruments on the personal property.
[ ] The note can be prepaid at any time without penalty.
[ ] (other provisions) _________________________________
[ ] The purchase price is allocated as follows:
| [ ] Land | $_________ |
| [ ] Buildings, fixtures, improvements | $ ________ |
| [ ] Equipment | $ ________ |
| [ ] Miscellaneous | $ ________ |
| [ ] Intangibles | $ ________ |
| [ ] Inventory | $ ________ |
| [ ] Goodwill | $ ________ |
| [ ] Non-compete covenant | $ ________ |
| [ ] Other: ______________________ | $ ________ |
| Total | $ ________ |
[ ] In addition to the above items, each party will be responsible for its own costs.
| [ ] All recurring costs, such as utilities and property taxes, will be prorated to the date of closing, with Seller paying for the date of closing. |
| [ ] Escrow. $ _____ from the net purchase price due to Seller will be placed in escrow with ______________________________________, to be available for |
[ ] uncollectible accounts receivable
[ ] real estate title defects or liens
[ ] specifically including environmental contamination
[ ] liens on non-real-estate assets
[ ] inventory adjustments
[ ] Seller's unpaid obligations as of the closing date
[ ] (other) _____________________
4. CLOSING. The transaction will close
| option 1: ( ) on the ____________day of _____________, _______. |
| option 2: ( ) at a time agreed to by Seller and Buyer. |
[ ] but not later than the __________day of ___________, ______.
at (location):
| option 1: ( ) | ___________________________________________ |
| option 2: ( ) a place agreed to by Seller and Buyer. |
| [ ] | 5. CLOSING INVENTORIES. |
Seller's inventory will be purchased
| option 1: ( ) for the amount of $ _______. |
| option 2: ( ) at the lower of cost or market, determined on an item-by-item basis. |
[ ] Buyer
| option 1: ( ) | will be required to purchase all of Seller's inventory. (Consider obsolete or damaged goods.) |
| option 2: ( ) | will not be required to purchase all of Seller's inventory. (Consider obsolete or damaged goods.) |
[ ] Immediately prior to the closing date, Seller and Buyer will together conduct a physical inventory of the products inventory and each will initial duplicate copies of an inventory sheet listing the inventory being purchased.
[ ] and the purchase price for each item.
6. ACCOUNTS RECEIVABLE. Seller's accounts receivable
| option 1: ( ) | are being purchased by Buyer |
| option 2: ( ) | are not being purchased by Buyer |
[ ] Seller warrants that the accounts receivable are valid and not subject to any defenses or setoffs.
Collection:
| option 1: ( ) | Seller will collect and retain Seller's accounts receivable. |
| option 2: ( ) Buyer will collect Seller's accounts receivable and remit them to Seller. |
| option 3: ( ) Buyer will collect and retain Seller's accounts receivable. |
| [ ] | 7. ASSUMPTION OF LIABILITIES. Buyer will not assume any liabilities of Seller. |
[ ] Seller will indemnify Buyer against all liabilities of Seller.
| [ ] | option 1: ( ) including those related to hazardous substances. |
option 2: ( ) except those related to hazardous substances.
| [ ] including those related to Seller's representations in the Sale of Business Assets Agreement or in any document delivered in connection with the Sale of Business Assets Agreement. |
[ ] including claims arising out of the operation of the business
[ ] or for products sold
prior to the closing date.
[ ] only for liabilities which exceed $ ________
| option 1: ( ) | per claimant. |
| option 2: ( ) | in the aggregate, whenever incurred. |
| [ ] only for liabilities discovered and reported to Seller within ______years following the closing. |
| [ ] Buyer will indemnify Seller against all liabilities of Buyer related to Buyer's representations in the Sale of Business Assets Agreement or in any document delivered in connection with the Sale of Business Assets Agreement. |
| [ ] | 8. ENVIRONMENTAL. |
| [ ] Audit: |
| option 1: ( ) | Seller will arrange for a Phase I environmental audit of the real estate |
| option 2: ( ) | Buyer will arrange for a Phase I environmental audit of the real estate. |
| option 1: ( ) | at Seller's expense. |
| option 2: ( ) | at Buyer's expense. |
| [ ] | If the audit or other reports indicate that the real estate may be contaminated with a hazardous substance |
| [ ] | and if the cost of testing and/or cleanup is reasonably expected to be less than _____% of the purchase price of the assets, |
Seller will pay for the testing and cleanup and the parties will proceed to close.
| [ ] | If the cost is reasonably expected to be more than that, Seller may terminate the Sale of Business Assets Agreement. |
| [ ] | Seller will be responsible for all obligations regarding environmental reporting to applicable governmental agencies. |
| [ ] | Seller will indemnify Buyer for obligations arising out of environmental contamination which exists before the closing (even if not discovered or actionable until some later date). |
[ ] but only to the extent that such obligations exceed $ ______ in the aggregate.
| [ ] | but only if acted upon by an applicable governmental agency within ________years after the closing. |
| [ ] | Buyer will indemnify Seller for all obligations arising out of environmental contamination which originate after the closing date. |
| [ ] | 9. EMPLOYEES. Buyer has no obligation to employ Seller's current employees, but may do so. |
| [ ] | Seller will pay any wages, severance pay, benefits, and retirement plan benefits accrued through the date of the closing. |
[ ] Seller will indemnify Buyer against all employee obligations arising prior to the closing date.
| [ ] | 10. COVENANT NOT TO COMPETE. Beginning on the closing date and for a period of _______ years, Seller |
[ ] and Seller's owners/partners (who own 5% or more of Seller)
will not, directly or indirectly,
| option 1: ( ) | within a ________-mile radius of |
| option 1a: ( ) | the Business |
| option 1b: ( ) | other: ____________________ |
| option 2: ( ) | anywhere within _______________________________________ |
engage in any business similar to the type of business involved in this transaction.
[ ] or solicit business from any of Seller's customers.
| [ ] | If a court finds that any of the non-compete provisions are too broad to be enforced, the court may modify those provisions to the extent necessary to permit their enforcement. |
| [ ] | Buyer can use all legally available remedies for a breach of the non-compete covenant, including injunctive relief. |
[ ] In consideration of the non-compete covenant, Buyer will pay to
| option 1: ( ) | Seller |
| option 2: ( ) | Seller's shareholders |
the sum of $ _______ payable
| option 1: ( ) | as a lump-sum at the closing. |
| option 2: ( ) | in _____(number) equal _____________ (e.g. monthly) installments of principal, together with interest compounded annually at _____%, beginning on the_____day of _______________ and on the _________________day of each succeeding ____________________. |
[ ] This amount
| option 1: ( ) | is already included in the purchase price described above in paragraph 3. |
| option 2: ( ) | is in addition to the purchase price described above in paragraph 3. |
| [ ] | 11. CONSULTING AGREEMENT. |
| Buyer |
| option 1: ( ) | and Seller |
| option 2: ( ) | and ____________________________________(name of key employee(s)) |
("Consultant") will enter into a consulting agreement, providing for transition-period consulting for a period of ___________(term).
[ ] with a minimum of ______ hours per week.
[ ] Compensation:
| option 1: ( ) | Consultant's compensation is included in the purchase price described above in paragraph 3. |
| option 2: ( ) | Consultant is to be compensated at a rate of $ ______ per _________. |
[ ] Consultant will provide the following assistance to Buyer during the term of the consulting agreement: ___________________________________________________
| [ ] | 12. TAXES. Seller will be responsible for the payment of all taxes which are payable in connection with the sale of assets. |
[ ] Taxes with respect to the real estate will be prorated to the date of closing.
| [ ] | 13. BULK SALES LAW COMPLIANCE. Seller will furnish to Buyer a complete list of existing creditors, with the amounts due to each, and agrees to cooperate with Buyer in all matters related to notice to such creditors in accordance with the provisions of the Uniform Commercial Code. |
| [ ] | 14. ANNOUNCEMENTS. The parties will cooperate with each other in announcing this transaction. |
[ ] Seller will cooperate with Buyer in notifying key customers and vendors.
[ ] in person.
[ ] through written correspondence.
15. ITEMS TO BE DELIVERED BY SELLER AT CLOSING. At the closing, Seller will perform all acts necessary to put Buyer in actual and complete possession and ownership of the assets, free of all liens, including providing the following documents:
[ ] Deed for the real estate and any necessary accompanying documents.
[ ] Bill of Sale for the
[ ] equipment.
[ ] inventory.
[ ] miscellaneous assets.
[ ] Assignment of
[ ] patents.
[ ] trademarks.
[ ] trade names.
[ ] copyrights.
[ ] contracts.
[ ] leases.
[ ] Assignment of motor vehicle titles.
| [ ] | All certificates of occupancy, licenses, tariffs, permits, authorizations, approvals and applications, required by law or issued by any government authority having jurisdiction over the assets. |
[ ] Releases of all liens.
[ ] Consents of any third parties necessary to permit the sale.
[ ] Consents of any third parties necessary to assign the contracts to Buyer.
[ ] Evidence that all necessary corporate proceedings of Seller have been taken to authorize the transaction.
[ ] Seller's attorney's opinion letter.
16. ITEMS TO BE DELIVERED BY BUYER AT CLOSING. At the closing, Buyer will deliver the following:
Payment of the purchase price for the assets.
[ ] Evidence that all necessary authorizations have been obtained from Buyer's governing body.
[ ] including a corporate resolution authorizing Buyer's purchase of the assets.
[ ] Buyer's attorney's opinion letter.
[ ] Employment agreement for __________________________________
[ ] Consulting agreement for ____________________________________
| [ ] | 17. FURTHER ASSURANCES. Seller will, from time to time after the closing, at Buyer's request, and without further consideration, provide such other instruments as Buyer may reasonably require to more effectively convey to Buyer good and marketable title and possession to the assets. |
[ ] and the name of the business.
18. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. The obligations of Buyer to close are subject to the following conditions to be satisfied as of the closing date:
[ ] Buyer will have obtained financing for the proposed purchase
| option 1: ( ) | on terms reasonably satisfactory to Buyer. |
| option 2: ( ) | providing for a loan for not less than _____% of the purchase price, repayment over a term not less than _____ years, and at an interest rate not greater than _____%. |
| [ ] | Buyer will upon execution of the Sale of Business Assets Agreement immediately make application for such financing and use its best efforts to obtain it. |
[ ] Buyer will satisfy or release such financing conditions by ____________.
| [ ] | and if Buyer fails to release such financing conditions by that date, Seller has the option to cancel the Sale of Business Assets Agreement. |
[ ] Buyer will have obtained inspection results, to its reasonable satisfaction, regarding:
[ ] the structural, mechanical, plumbing, or electrical components of the building.
[ ] pest damage to the building.
[ ] unsafe conditions or damage to the premises.
[ ] the presence of radon gas or lead-based paint hazards.
| [ ] | other conditions, the inspection of which is customary to the locality and/or required by law. |
[ ] the condition of the assets.
[ ] Copies of all pertinent documents and records have been available to Buyer for inspection.
| [ ] | Buyer has not discovered any material error, misstatement or omission in the representations and warranties made by Seller. |
[ ] The representations and warranties of Seller continue to be true and correct.
[ ] Seller has performed all terms and conditions of the Sale of Business Assets Agreement.
[ ] Buyer has received the items to be delivered at the closing by Seller.
| [ ] | Between the date of the Sale of Business Assets Agreement and the closing date, there have not been any materially adverse changes in the assets or the business. |
| [ ] | No legal proceeding has been instituted or threatened which materially affects the assets or the business or which may interfere with the closing. |
| [ ] | Buyer has obtained all necessary or appropriate licenses, permits and governmental approvals to enable it to acquire the assets and operate the business. |
[ ] Buyer will use its best efforts to obtain such items.
[ ] Seller and Buyer have obtained all consents of any third parties necessary to permit the closing.
[ ] including the consent of the landlord to assign the premises lease to Buyer.
| [ ] | The real estate is not contaminated by any hazardous substances, proven to Buyer's reasonable satisfaction. |
| [ ] | in compliance with the environmental provisions contained in the Sale of Business Assets Agreement (described above in paragraph 8). |
19. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. The obligations of Seller to close are subject to the following conditions, to be satisfied as of the closing date:
| [ ] | Seller has not discovered a material error, misstatement or omission in the representations or warranties made by Buyer. |
[ ] Buyer has performed all terms and conditions of the Sale of Business Assets Agreement.
[ ] Seller has received the items to be delivered at closing by Buyer.
20. REPRESENTATIONS OF SELLER. Seller represents and warrants to Buyer the following:
[ ] Seller is validly organized, in good standing, and operates with all necessary authority.
[ ] The Sale of Business Assets Agreement is legally binding against Seller.
| [ ] | The execution and performance of the Sale of Business Assets Agreement will not violate Seller's organizational documents or any of Seller's agreements, including loans. |
| [ ] | There is no legal claim pending or threatened against Seller which might have an adverse effect on the assets, the business, or this transaction. |
[ ] except as described on Exhibit H.
| [ ] | True and complete copies of all contracts, leases, agreements, licenses and permits relating to the operation of the business or the assets have been provided to Buyer by Seller. Seller and the other parties to the agreements are not in default under any of the agreements. The execution and performance of the Sale of Business Assets Agreement will not constitute a default under any of the agreements. |
| [ ] | A true and complete list of all of Seller's employees, and their pertinent history with Seller, has been provided to Buyer. |
[ ] At the closing, Seller will transfer good and marketable title to the assets.
[ ] All of the tangible assets are in good working order.
| [ ] | The assets and the business operations are insured for adequate amounts under valid liability and casualty policies. |
[ ] The real estate is not contaminated with any hazardous substances.
[ ] to the best of Seller's knowledge.
| [ ] | Seller is not in violation of any requirements of any environmental law with respect to the operation of the business or the assets. |
[ ] to the best of Seller's knowledge.
| [ ] | Seller has timely filed all federal, state and local tax returns and has paid all applicable taxes and assessments which have become due and payable. |
| [ ] | Seller has provided Buyer with accurate financial statements which fairly represent the business. |
| [ ] | No statement, representation or warranty by Seller in the Sale of Business Assets Agreement or in any document delivered in connection with this sale contains any untrue or misleading statement of material fact. There is no information which would have a material adverse effect on the assets or the business which has not been disclosed to Buyer in writing. |
| [ ] | Seller has not participated in any retirement plan for the benefit of any employees of the business. |
| [ ] | Seller will change its name after the closing and take all necessary steps to transfer to Buyer the name used in connection with the business. |
[ ] Seller has held all necessary licenses and permits to conduct the business.
21. REPRESENTATIONS OF BUYER. Buyer represents and warrants to Seller:
[ ] Buyer is validly organized, and in good standing.
[ ] The Sale of Business Assets Agreement is legally binding against Buyer.
| [ ] | The execution and performance of the Sale of Business Assets Agreement will not violate Buyer's organizational documents. |
| [ ] | There is no legal claim pending or threatened against Buyer which might have an adverse effect on this transaction. |
22. NEGATIVE COVENANTS OF SELLER PENDING CLOSING. From the date of the Sale of Business Assets Agreement and until the closing, with respect to the assets and the operation of the business, Seller will not:
[ ] Incur any obligations except in the ordinary course of business.
[ ] Allow any additional liens on the assets.
[ ] Sell any of the assets.
[ ] except sales of inventory in the ordinary course of business.
[ ] Amend, transfer or terminate any of the contracts to be assumed by Buyer.
[ ] Grant salary or benefit increases to employees.
[ ] Enter into any transactions other than in the ordinary course of business.
23. AFFIRMATIVE COVENANTS OF SELLER PENDING CLOSING. From the date of the Sale of Business Assets Agreement and until the closing, Seller will:
[ ] Conduct its business only in the usual course of business.
[ ] Maintain the assets and the business.
[ ] including employee and customer relationships.
[ ] including business records and accounts.
| [ ] | Pay all costs of operating the business as they become due and all liabilities existing on the closing date unless assumed by Buyer. |
[ ] Comply with all laws.
| [ ] | Not breach any of the contracts or cause any representation or warranty of Seller to be untrue. |
[ ] Keep all insurance in effect.
| [ ] | Allow Buyer or Buyer's representatives reasonable access to the facilities, assets and records. |
24. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of Seller's representations, warranties, covenants and agreements will survive the closing.
[ ] for a period of _____years.
25. EXPENSES. Buyer and Seller will each pay their respective expenses in connection with this transaction.
[ ] Seller is responsible for any broker fees.
26. RISK OF LOSS. All risk of loss to the assets will remain with Seller until the closing date. If a material loss of the assets occurs prior to the closing date, Buyer has the right to terminate the Sale of Business Assets Agreement.
27. NOTICE. Any notice required by either party to be given to the other will be in writing addressed to the other party at its above address, and deemed given when personally delivered or 3 days after it is mailed.
28. SUCCESSORS AND ASSIGNS. The Sale of Business Assets Agreement will be binding on the successors and assigns of the parties.
29. CONSTRUCTION. The Sale of Business Assets Agreement will be governed by the laws of the State of ________________. If any provision of the Sale of Business Assets Agreement is ineffective, the other provisions are not affected.
30. COUNTERPART/TELEFAX SIGNATURES. The Sale of Business Assets Agreement may be executed in counterparts, and may be accepted by sending an executed copy of the signature page by telefax if the original is also mailed on the same date.
31. ENTIRE AGREEMENT. The Sale of Business Assets Agreement contains the entire agreement of the parties with respect to the subject matter and cannot be modified unless in writing and signed by all the parties.
