Scotland:Business sale

About these documents:

These are agreements for the sale of a business by either a company or a limited liability partnership or one or more individuals. 

First, we cover matters common to most or all of the agreements, then we look at each document in turn. 

Who will use these documents?

Any individual or company selling or buying a business or enterprise of any sort.  It is usual for the Buyer to produce the sale document but there is no reason why the seller should not obtain an advantage by making the document his and thereby obtaining the advantage of preliminary editing in his favour.

Key features:

• these agreements are suitable for any type of trade or business;
• extensive use of warranties to encourage full disclosure by the seller;
  Note: warranties have been used only so far as appropriate to the subject matter of the sale.
• designed for the deal to be completed on the same day, not at some future time;
• purchase price apportioned among the assets to simplify tax planning;
• comprehensive list of matters to be done before completion and documents to be handed to the buyer;
• full account taken (for Internet businesses) of intellectual property issues such as domain name transfers and web site hosting;
• provisions to prevent seller setting up in competition;
• suitable provisions for contract to cover transfer of leasehold and freehold property;
• up to 90 individual warranties where required.

These documents (except SC-COM771 and SC-COM781) include provisions for:

• terms of the agreement for sale and list of subject matter of sale;
• allocation of purchase price, when and how it is to be paid;
• what happens to complete the transaction;
• dealing with counting and hand over of stocks;
• responsibility for creditors and debtors;
• seller’s warranties;
• seller’s future activities;
• mediation of a dispute before court action;
• other legal points.

The 90 individual warranties are in sections relating to:

A          Assets

B          Stocks             

C          Accounts

D          Employees

F          Licences, consents and passwords                    

G          Insurance                     

H          Joint ventures and partnerships  

J           Statutory restrictions

K          Litigation

L          Sellers activities

M         Contracts

N          Defective products and services liabilities

P          Freehold properties

Q          Leasehold properties

R          Intellectual property

S          Internet domain names

T          General