How to draft a good business purchase offer?

hdbl As a businessman you have to be realistic in your approach. It is rightly said that Rome was not built in a day. This is indeed true if you are testing waters venturing into business for the first time. After you have located a suitable business firm, you would have to comply with the necessary paper work to finalize the purchase.

To avoid future conflicts, it is in the best interest of both the parties to have everything in written. This can also serve as a documentary evidence should a legal dispute arise later. Terms and conditions should be clearly laid out in accordance as per the mutual agreement between buyer and seller. It thus becomes imperative to carefully draft the purchase offer before buying a business.


Step1 – Lay down your priorities regarding purchase of tangible or intangible assets such as office equipments, furniture or fittings, goodwill etc.

Step2 – give details of the price to be paid and also specify the payment terms. This would include details such the amount you would pay by cash, check, single payment or installments etc.

Step3 – Incorporate non competition clause that restricts current owner from setting up similar business within your business area for a certain number of years. This will ensure that you concentrate on core business operations in the initial stages without worrying about your competitors.

Step4 – Give due consideration to corporate documents such tax returns, license, lease agreements, permits, property papers before you sign on the dotted line. Ensure which is hold good in case of transferability and negotiate accordingly.

Step5 – Do not forget to include a clause related to “good faith” and “non binding agreement” at the end of this purchase offer letter. This is just a documents which just expresses the terms and conditions related to the offer.

Bhrat Brij

Leave a Reply

Your email address will not be published. Required fields are marked *