Information & Benefits: The following information and benefits is what distinguishes us from other online providers.
Special Note Most transactions for small business sales should probably be via an Asset Purchase/Sale Agreement. The Sale of Stock method is generally less preferable because the Buyer can never be absolutely sure of the debts or liabilities of the corporation being purchased. Conversely, an Asset Purchase/Sale Agreement allows the Buyer to take control of a business without assuming any of the corporation's liabilities! In addition, the Buyer gets a stepped-up tax basis on the depreciable assets of the business being purchased.
Sale and Purchase of Shares Seller promises to sell the Shares free and clear of all liens and encumbrances and evidencing a one hundred percent (100%) ownership interest in the Company. The stock will be fully paid, non-callable and non-assessable. Seller shall take such action as required to transfer the Shares to Purchaser at Closing.
Purchase Price, Payment & Security The total price is indicated here and the terms of payment follow. Usually, there is a cash deposit with the balance paid at close. The balance may be paid in cash or pursuant to a promissory note or the balance due may be deferred until a later date. (Various methods for paying off balance including, but not limited to: monthly, quarterly, and annual payments, variable or fixed interest rates, balloon payments, etc.) NOTE: If the balance due is paid pursuant to a promissory note, the lender may require security.
Representations & Warranties of Seller The Selling Shareholder acknowledges his understanding and acceptance of the following:
-- That the Company is duly organized, validly existing, and in good standing under the laws of the State of incorporation, and the certificate of incorporation and amendments thereto and by-laws delivered to Buyer are complete, correct and current. -- That the Company is not required to be qualified to do business in any other state. -- That the Company's common stock is validly issued and outstanding, fully paid and non assessable, and the Seller has full right, title, and interest without any liens, restrictions on transfer, or encumbrances thereon, and, accordingly, the shares delivered to Buyer herewith constitute all of the issued and outstanding shares of the Company. -- That there are no outstanding options or rights to purchase shares of the Company and no outstanding securities with right of conversion into shares of the Company. -- That the Company has good title to all of the assets set forth in an exhibit, free of all liens and encumbrances, and there were no liabilities, whether fixed or contingent, and the Company had no nonrecurring items of income at Closing. -- That there has been no change in the condition, assets, liabilities, or business of the Company, other than changes in the ordinary course of business, none of which has been materially adverse, and Seller has no knowledge of any facts that materially and adversely affect the prospects of the Company's business. -- That all machinery and equipment of the Company are in good condition and repair. -- That the Company has filed all federal, state, and local tax returns that it is required to file by the date hereof and has paid all taxes due on such returns, and such returns are in all respects true and accurate. Copies of all such returns have been delivered to Buyer. -- That there is no litigation pending, and to the best of Seller's knowledge there is no litigation threatened against the Company. There is no labor dispute pending or, to the best of Seller's knowledge, threatened. -- That there are no contracts, leases, or commitments of any nature now outstanding or in effect except: -- That to the best of Seller's knowledge, the Company is in compliance with all laws and regulations relating to the conduct of its business. -- That since its inception, the Company has not declared, set aside, paid or made any dividend or other distribution in respect of its capital stock and has not made or caused to be made, directly or indirectly, any payment or other distribution of any nature whatsoever to any of the holders of its capital stock except for regular salary payments for services rendered and reimbursement of business expenses.
Seller's Documents - Because of the difficulty in ascertaining all of the Corporation's debts and liabilities, the Buyer requires that the seller provide the following:
-- Stock certificate constituting the Seller's one hundred percent ownership interest in the Company, duly executed and assigned to Purchaser. -- Resignation of Seller as an officer and director of the Company. -- Copies of all bank statements and all cancelled checks of the Company. -- Copies of any insurance policies of the Company, including, but not limited to liability, property, casualty, health and accident and Workers Compensation insurance. -- Copies of the Company's Articles of Incorporation, Company Minutes and Bylaws, up to date and to the satisfaction of Buyer's Counsel. -- A copy of the acceptance by the Internal Revenue Service of the Company as a Sub-Chapter S Corporation. -- Copies of all correspondence and other documentation from the Internal Revenue Service received by the Company. -- A list of all material men and labor men who have supplied the Company since its inception. -- A copy of the office lease and any other leases obligating the Company. -- A list of all contracts in which the Company is a party to, including copies of said contracts. -- A listing of all corporate assets including invoices for the purchase of same and bills of sale, if any. -- Original releases of liens executed by all labor and material men of the Company who have performed work for the Company. -- Stock Certificate #2, which will be issued to Purchaser at Closing, constituting the Purchaser's one hundred percent ownership interest in the Company, duly executed by Seller.
Mediation and Arbitration Mediation and Arbitration should always specify a location in Client's jurisdiction (preferably, in the same county where they run their business). Mediation is a non-binding way to settle the dispute quickly and amicably. If unable to settle in mediation, arbitration is first option available. Arbitration is the preferred alternative to litigation because of speed, cost, and ability to maintain low profile (no info is publicly available).
Jurisdiction & Venue Always make venue and jurisdiction as convenient to client (Seller) as possible.
No Modification or Waiver No modifications except those specifically agreed upon by the parties in writing. Any waiver of a term or provision will not act as a waiver of any other provision.
Notices Notices should always list the current and best addresses where each party may contact the other for whatever reason.
There are many benefits to starting a business and
incorporating. Some of the benefits of starting a business
include protection of your personal assets, ease of raising
capital, gain anonymity, available tax benefits and more!
Material presented on AmeriLawyer.com is intended for information purposes only. It is not intended as professional advice and should not be construed as such. The U.S. Treasury Department requires us to inform you than any information obtained from this website is not intended or written by our law firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Advice from our firm relating to Federal tax matters may not be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer.