Business Transfer Agreement

This is our Business Transfer Agreement template, which is for use when transferring or selling a business and its assets. Often referred to as an “asset sale agreement”, this contract works to transfer the business (i.e the name/ brand and customers) and the other assets used by the business to the buyer.

This Business Transfer Agreement template is suitable for selling the business to or from any type of legal entity, such as sole trader, partnership or limited company.

The contract is suitable for the sale and transfer of any size of business, but it is best suited to a small to medium-sized business.  For the sale and purchase of a bigger or more valuable business, the buyer will normally require more detailed warranties, among other things. The contract would need to be a lot longer and more detailed than this simplified agreement as a result.

That said, this is our most complex template, and normally you should not tackle it without legal advice. However, if you are (a) confident and (b) prepared to put the time in to adapt it to your own needs (with the help of our guide), then it should suit you.

Draft your Business Transfer Agreement from our Template

This template was drafted by our co-founding lawyer David, who is an expert commercial lawyer with twenty-five years’ experience. As such, you get a template that we have carefully drafted for a lay-person to be able to use.

We have drafted our contract template in a shortened, plain English format. It is free of legal jargon, whilst remaining comprehensive. We have written guidance notes which take you through every clause in the agreement. They explain the nature of the clause and exactly what to edit. To get a better idea of the contents of the template before you buy, please have a look at the guide – click here.

Download our business Transfer Agreement template in Microsoft Word format once purchased. You can simply download it to your computer and edit it as you need. We personally draft all our templates, and we are ourselves commercial and business lawyers. So we have absolute confidence that you will find our template suitable for your needs.

Satisfaction Guaranteed with our Business Transfer Agreement Template

If you buy the Business Transfer Agreement template and it is not suitable, contact us. If, for any reason, you are not entirely satisfied, then we will refund your payment without question. That is our 100% satisfaction guarantee!

You can easily edit the Business Transfer Agreement template to fit your specific needs. It comes with full guidance notes which you can read here. We include a copy with the download. You can then easily refer to them when you are drafting your contract.

There are a range of clauses and schedules in the agreement. Please browse through the guide to get a full understanding of the template before you buy it.

If you are not paying the full price for the business at the point that you buy it (i.e. you are deferring part or all of it and paying it, for example, by instalments), then you may also want to put in place a loan agreement to cover how and when you pay the price. Please see our list of Related Templates to the right for the different loan agreements and security you may need.

Key Considerations When Purchasing a Business

If you are the purchaser of the business and its assets, then you should familiarise yourself with the requirements of the “TUPE” legislation. Our guide includes a brief summary of how the TUPE Regulations affect business purchases where there are employees in the business.

This legislation addresses what will happen if the company has employees. When a business is purchased as a going concern, then the TUPE legislation applies. It requires that the employees of the business also transfer over, along with the business assets.

The transfer of employees might be something that you are not familiar with. If so, you might wish to seek the advice of a legal expert on this.

If you would like more information on the Transfer of Undertakings (Protection of Employment) Regulations 2006 see the ACAS guide to TUPE.

Are you taking on the lease too?

If you are going to occupy the business premises and they are leased, then you will also need an assignment of the lease. For this you need:

• the landlord’s permission; and
• to time the signing of the assignment of the lease to coincide with the signing of the business purchase agreement.

We have all the necessary documents: click on this link for our discount package. Note that if the landlord has their own preferred documents, then:

• you may only need to produce the deed of assignment of the lease, which you can buy separately; and
• the landlord will probably supply the licence to assign and AGA (authorised guarantee agreement).

FAQs regarding business transfer agreements

Below we have answered the top questions from the Internet on this topic.

What does a transfer agreement look like?

A business transfer agreement is a fairly lengthy agreement that covers all aspects of the sale of a business. The basic details it covers are (a) what is being sold, (b) the price to be paid, (c) when the price will be paid and (d) warranties from the seller to the buyer that the business and its assets are in good condition. It will also include limitations on the liability of the seller under the warranties.

What is a BTA business transfer agreement?

The term “business transfer agreement” refers to the contract for selling a business operation and its associated assets, licences, contracts (both with customers and suppliers), order book and employees to another owner. As you can imagine, given most business are fairly substantial and complex operations, the legal contract needs to be fairly detailed to cope with and cater for all of that.

How do you write a simple business agreement? How do you write a transfer agreement?

These are the main points to cover in a simple business sale agreement:

1. It should be in writing.
2. Include the names and addresses of both parties.
3. Set out what each party must do to fulfil the contract. For example, one party often supplies a particular service or goods to a certain specification and the other makes payment for those goods or services.
4. Now add in details of the agreement. If necessary, set out the specification of the business, goods or services being sold or supplied in a schedule.
5. Set out the timing of payment for the business, goods or services being sold or supplied.
6. Set out what could give rise to warranty claims.
7. Detail how to bring warranty claims and any limitations on them.
8. Include where to sign it.

How do I transfer a contract to another company? How do I transfer a contract to someone else?

Contracts (if they are not signed as deeds) can be freely assigned by the party having the benefit of the contract, unless there is a clause saying the contract cannot be assigned. The party “having the benefit” is usually the party paying for goods or a service.

Deeds cannot be assigned by one party without the consent of all parties – this is done by using a “novation agreement”. You can also use a novation agreement if you need the consent of another party to a normal contract.

If you don’t need consent, you would assign a contract by using a deed of assignment.

What is the difference between a contract and a TR1?

A TR1 transfers freehold titles or long leasehold titles (leases originally granted for 7 years or more) to land and/or buildings. It is the form you would use to register the transfer at the Land Registry.

Normally, you would also have a contract to cover the price, when you will complete on the sale and to set out other relevant details. The contract therefore normally works together with the TR1, but each does a different job.

Who signs a business transfer agreement?

The parties sign the agreement: the buyer and the seller. Where a party is a limited company, a director normally signs for it.

What does BTA mean in agreement?

In the context of a business transfer, BTA could stand for business transfer agreement, but lawyers do not normally use this abbreviation. Lawyers more commonly use BPA (business purchase agreement) or APA (asset purchase agreement). They both mean essentially the same thing.

Can you write your own agreement? How do I make my own agreement?

Yes, you can write you own contract and, using a great template from Legalo, you will find the job very easy. Using a template as the starting point, not only speeds things up a huge amount, but it means you are unlikely to miss an important aspect of the contract.

You should always make your agreement in writing, as a verbal contract will be very difficult to enforce in court if it develops into a dispute. Verbal contracts are more likely to end up in disputes too.

Is a business agreement legally binding?

There is no reason a written business agreement would not be legally binding, unless:

• it did not include consideration, e.g. payment (unless signed as a deed);
• at least one of the parties did not sign the contract correctly;
• it was for an unlawful purpose; or
• the contract contains parts which are unfair terms. This means they are contrary to the Unfair Contract Terms Act 1977, but the law sets the bar fairly high on this, unlike for contracts with consumers. Only those parts would be unenforceable, and the rest of the contract would still be valid.

Can I transfer my company to another person?

Yes and you can sell a business in one of two ways:

• you can sell the business, assets, contracts and order book by a business sale or asset sale agreement; or
• You can sell 100% of the shares in the company that operates the business and owns the assets, etc. You would normally do this by a share sale agreement and a stock transfer form.

You don’t operate the business through a limited company, then option one above is the only way to sell it.