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Business Transfer Agreement Template

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Created by:

​[Transferor.FirstName][Transferor.LastName] ​[Transferor.Company]​

Prepared for:

​[Transferee.FirstName][Transferee.LastName]

​[Transferee.Company]​

This Business Transfer Agreement template is a legal document and should include details of both parties and their terms and conditions for this agreement. It may be possible to be represented by their personal and corporate lawyers to assist with the business transfer accordingly.

This downloadable template will cover some of the necessary clauses in the transfer agreement, and you can tailor it according to your business strategy and additional processes. It was made to save you time in drafting this agreement from scratch.

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KNOW ALL MEN BY THESE PRESENTS:

This Business Transfer Agreement (“The Agreement”) is made and executed as of this [Document.CreatedDate] (“the Effective Date”) by and among/between:

Transferor(s): [Transferor.LastName], [Transferor.FirstName], (Age), of legal age, currently residing at [Transferor.StreetAddress], [Transferor.City], [Transferor.State], [Transferor.PostalCode], [Transferor.Country] (collectively “The Transferor”);

Transferee(s): [Transferee.LastName], [Transferee.FirstName], (Age), of legal age, currently residing at [Transferee.StreetAddress], [Transferee.City], [Transferee.State], [Transferee.PostalCode], [Transferee.Country] (collectively “The Transferee”);

RECITALS

  1. The Transferor is the owner of the duly registered business that is set to be transferred to new ownership under this Agreement.

  2. The Transferee is the party who will be receiving the title as the new owner or custody of the duly registered business under this Agreement.

WHEREAS, in consideration of the above recitals, the representations, warranties, covenants, and agreement stated in this Agreement and in good faith and valuable considerations, the receipt and accuracy of which are now acknowledged by both Parties.

WHEREAS, the Transferor is the duly registered and the beneficial owner of the [Transferor.Company], owns a premise and carries out business known as (business name) under (type of industry) industry located at (business address: street name, city, state, postal code, country) established since (business start date).

WHEREAS, the Transferor does hereby transfer, assign the business, and make over unto the Transferee.

WHEREAS, the Transferee is hereby present and accepting the business transfer and assignment.

ASSETS

The Transferor hereby declares all the assets, both tangible and intangible, that are intended for this Agreement.

Transferor's List of Assets

  1. (Asset) | (Description) | (Acquisition Date) | (Current Value) | (Current Status)

  2. (Asset) | (Description) | (Acquisition Date) | (Current Value) | (Current Status)

  3. (Asset) | (Description) | (Acquisition Date) | (Current Value) | (Current Status)

  4. (Asset) | (Description) | (Acquisition Date) | (Current Value) | (Current Status)

  5. (Asset) | (Description) | (Acquisition Date) | (Current Value) | (Current Status)

The only listed asset in this particular section should be the assets included, intended, and covered by this transfer agreement. We do not want the transferor to inadvertently transfer a particular asset just because it is listed in the document.

LIABILITIES

I do hereby confirm to the following terms and conditions and undertake that:

  1. The Transferee acknowledges the liabilities that come along with this Agreement, such as the amounts due and payable to the employees in respect of their employment with the new ownership and new management of the [Transferor.Company] after the successful business transfer shall be borne, discharged, and paid by the Transferee.

  2. All other statutory dues and liabilities about the Company and all related accrued accounts after the period of transfer shall be discharged by the Transferee.

  3. As the business transfer has successfully concluded, the Transferor explicitly authorizes the Transferee to collect, demand, enforce, recover, and receive the debts, and provide valid and binding receipts and discharges and in respect thereof, and this Agreement will serve as if the Transferee is the absolute owner thereof – to the whole and with the same effect as the Transferor.

  4. The Transferor, before the new ownership, should be able to get the Transferee acquainted with all the matters related to the business, especially the current financial standing and its financial goals.

  5. The Transferor will be presenting in detail all the liabilities of the business, especially financial liabilities, along with its relevant terms and conditions and all the names of the debtors, creditors, and investors. Those stakeholders have direct involvement with the business finances. The Transferee will be referred to the Head of the Finance Department to further discuss all the business books and other accounting-related matters.

If other liabilities can be added here, feel free to add and list them according to the list to be provided by the accounting office.

ADMINISTRATION

  1. The Transferor is required to submit the list of all employed personnel of the business from the top of the organizational chart, including all the in-house support the business has. The Transferee will be referred to the Head of the Human Resources Department to further discuss all the implementing rules and regulations about the business workforce.

  2. The Transferee will be referred to the Administration Office to further discuss all the amenities available as well as its business privileges, should there be any.

RESTRAINT OF TRADE

The Transferee may not directly or indirectly engage, manage, own, be employed by, operate, participate, control, or be connected with the management and operation of another similar type of business anywhere in the United States for a period of 12 months. If the Transferee breach this section, the Transferor should be entitled to an injunction for the prevention of the Transferee violating this section.

This restraint of trade or “non-competition clause” ensures that there should be no conflict of interest and the limitation of business participation when the Transferee takes over the business. It is commonly used to limit the business to participate in any activity that could cause economic injury to other businesses or the whole industry. The period range is solely dependent on both parties however it could be more or less than 12 months.

CONFIDENTIALITY

The Transferee shall not, without written consent, share any part of information owned and related to the Company, especially those information that is not published publicly or not considered a public record. This information includes but is not limited to client data, company trade secrets, affiliates, third parties, financial status, investor's list, suppliers, and any other relative information that the employees knew and should have known, which are all confidential.

WHEREAS, this Agreement should be signed in counterpart.

NOW, THEREFORE, the Parties of this Agreement, the Transferor and the Transferee, acknowledge their part of this Agreement. The Parties will request a special meeting arrangement to properly document all the details required for the takeover of the Transferee. All necessary documents such as the contracts, constitution and by-laws of the organization, rules and regulations, memorandum, and bulletin exclusive for the use of the Company.

ACKNOWLEDGEMENT

State/Republic of (insert name)

County/City of (insert name)

SUBSCRIBED AND SWORN TO BEFORE ME, a NOTARY PUBLIC from (Country/City), (State/Country), [Document.CreatedDate]; personally appeared bearing the government identification with details provided below, to wit;

(Name ID Type/Number Date/Place of Issuance)

​

Signature
MM / DD / YYYY

​

Signature
MM / DD / YYYY

​[Transferee.FirstName][Transferee.LastName]

(Transferee.ID) (details)

​[Transferor.FirstName][Transferor.LastName]​

(Transferor.ID) (details)

Known to me and known to be the same persons who executed the foregoing instrument consisting of four (4) pages, including the page wherein this acknowledgment is written, and they acknowledged that the same is their own free and voluntary act and deed and that of the corporations represented.

IN WITNESS WHEREOF, I have hereunto set my hand and the notarial seal on the date and in the place herein above written.

Notary Public

Doc. No. (insert number);

Page No. (insert number);

Book No.(insert number);

Series of (insert number);

​

Signature
MM / DD / YYYY

​[Notary.FirstName][Notary.LastName]​

FAQ

  • A business transfer is a movement of business ownership from one person, to a new shareholder, to a new business entity, a merger, or acquisition in which new ownership will take over for the business continuity.

  • A business transfer agreement needs to include an exhaustive list of all the business’ assets — both tangible and intangible. The agreement should also include all liabilities and a full list of the company’s employees. Furthermore, list all commercial contracts and the status or terms of these agreements to provide context to the new owner.

  • To transfer business ownership, you’ll need to create a membership certificate for the company’s new owner and take your name off the owner list on your Articles of Organization. Lastly, notify the business registration agency in your state or territory regarding the updated membership and owner list.

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Business Transfer Agreement Template

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This sample Business Transfer Agreement Template is a legal document that must contain information on the parties involved as well as the terms and conditions of the agreement.

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