30 NOV 2018
Starting a new business can be truly exciting. The promise of being in control of one’s own destiny is seductive and there are now more opportunities than ever before to make a success of it. Rather than re-invent the wheel, some people prefer to buy an existing business. There are a variety of reasons why this is often a good idea, including:
Make Sure You Use a Business Purchase Agreement
If you’ve decided to buy an existing business for all or any of the above reasons, a wealth of opportunity awaits. However, it’s also important to protect your interests during this time and ensure that all of the paperwork is filled in correctly.
The single most important document you’ll need when you go through this process is the Business Purchase Agreement. If you’re about to buy an existing business, you can use ShakeUp!’s Business Purchase Agreement template that guides you to prepare your own Business Purchase Agreement that covers most of the key terms and conditions you would require. It’s convenient and easy!
What Is The Business Purchase Agreement For?
In the simplest of terms, a Business Purchase Agreement in Malaysia is an agreement between the seller and the purchaser for the ownership rights to the business. Not only is it a legal record of the sale, but also contains any terms and conditions of the sale, including any stock or inventory that is included, property, existing contracts, other assets and whether the purchaser is also taking on the liabilities of the business.
Why Does It Matter?
The Business Purchase Agreement functions as a record of the transaction, but it also serves to protect both seller and purchaser. Because all of the terms and conditions are laid out, including the sale price, each party is aware of the terms of the sale.
When purchasing an existing business, the purchaser may choose to legally assume responsibility for the liabilities of the business. This includes any debts, financial loans, and staff payables. In this context, the Business Purchase Agreements outlines in details all of the liabilities that are known. However, as is very common, the purchaser may want to just purchase the assets of the business. In this instance, the Business Purchase Agreement will outline the details of all the assets that are being bought over.
When Buying an Existing Business, Protect Yourself
It’s essential to understand the importance of the Business Purchase Agreement when buying an existing business. It protects both the buyer and the seller and outlines all of the details of the sale, as well as the agreed upon sale price. When the document has been prepared correctly, there should be no arguments.