Selling a small business is a life-changing event; having the proper legal documents in place will make the entire process simpler and safer. The legal forms listed below can be drafted by a qualified business attorney or purchased online. Buying legal forms online can help save on costs, but consider consulting an attorney for custom advice relating to your business.
Bill of Sale
Like many legal documents, a bill of sale can be short and simple or lengthy and complicated -- but it is a binding legal document to be kept on file after the transaction is complete. Signed by both parties, a bill of sale lays out some specifics regarding the transaction. This document is critical to the transaction as it sets the selling price, any financing terms and any special arrangements made by the parties such as training or post sale support.
Covenants Not to Compete
When selling a business don't be surprised if the buyer asks for a signed covenant not to compete. Covenants not to compete are sometimes simply called non-compete agreements and they limit the ability of a given individual (such as the seller or the seller's key employees) to enter into a similar business within a certain time frame or geographic region. These documents vary from state to state in terms of both format and enforceability.
During the working years of a partnership the owners of the partnership should have a buy-sell agreement in place. A buy-sell agreement details how ownership interests in the company are transferred in the event that one owner dies, becomes disabled, retires or commits a felony. This agreement is often used to transfer a business from one generation to another within a family and should always be funded by insurance when possible.