Question 1

What is a Sale of Business Agreement?

Accepted Answer

A Sale of Business Agreement documents the transfer of business assets from a seller to a buyer. Unlike a share sale, this transfers specific assets such as equipment, inventory, goodwill, and contracts rather than ownership in the company entity itself.

Question 2

Is this template compliant with South African law?

Accepted Answer

Yes, this template is drafted in accordance with South African commercial law and includes provisions addressing VAT, employee transfers under section 197 of the LRA, and other regulatory requirements applicable to business sales.

Question 3

Can I customize this template?

Accepted Answer

Absolutely. The template features a customization table to specify which assets are included or excluded, the purchase price, payment terms, effective date, and any conditions that must be met before transfer.

Question 4

What key clauses are included in the template?

Accepted Answer

The template covers: detailed asset schedule; purchase price and payment terms; employee transfer provisions; assumption of liabilities; warranties and representations; restraint of trade; conditions precedent; and risk and possession transfer.

Question 5

Who should use this template?

Accepted Answer

This template is ideal for business owners selling their operations or specific business units, as well as buyers acquiring going concerns. It's commonly used when the buyer wants specific assets without assuming all company liabilities.

Question 6

What format is the template delivered in?

Accepted Answer

The template is delivered in Microsoft Word format (.docx), allowing customization of the asset schedule and terms before signing.

Template Sale of Business
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Template Sale of BusinessAgreement