Business Sale Agreement with Assets and Goodwill

1. Sale and Purchase

On the Closing Date and against payment of the Purchase Price, the Seller shall sell, assign, transfer and deliver to the Buyer all right, title and interest in the Transferred Assets described in this Agreement, free from encumbrances except those expressly disclosed and accepted by the Buyer.

2. Transferred Assets

Subject to the Schedules and applicable law, the assets sold may include:

3. Excluded Assets

The following shall remain the property of the Seller unless expressly included in Schedule A: cash and bank balances, personal assets, tax refunds relating to pre-Closing periods, insurance claims relating to retained liabilities, assets expressly listed in Schedule B, and any asset that cannot lawfully be transferred without a required approval or consent until that approval or consent is obtained.

4. Purchase Price

The total purchase consideration for the Transferred Assets and Business shall be Rs. __________ (Rupees __________________ only), subject to adjustments expressly provided in this Agreement.

The Buyer shall pay:

1. advance / earnest money of Rs. __________ on execution;
2. Rs. __________ on or before Closing; and
3. Rs. __________ on __________________, subject to the agreed conditions.

5. Allocation of Consideration

Where legally or commercially required, the Parties shall set out in Schedule C the agreed allocation of the Purchase Price among inventory, movable assets, intellectual property, goodwill and other categories. The Parties shall obtain appropriate tax and accounting advice before finalising the allocation.

6. Taxes, GST, Stamp Duty and Registration

Taxes arising from the transaction shall be borne and discharged as required by applicable law and as specifically agreed in Schedule D. The Parties shall determine the GST treatment, direct-tax consequences, withholding obligations, stamp duty and registration requirements applicable to the actual structure of the transaction.

Nothing in this sample clause should be read as assuming that a particular GST exemption, slump-sale treatment or stamp-duty rate applies to every business transfer.

7. Closing

Completion of the sale ("Closing") shall take place on __________ or on another date agreed in writing. At Closing, the Seller shall deliver the agreed transfer instruments, possession of movable assets, keys, access credentials, records, consents and other Closing Deliverables listed in Schedule E, and the Buyer shall pay the amount due at Closing.

8. Conditions Precedent

Closing is subject to satisfaction or written waiver, where legally permissible, of the following conditions:

1. completion of legal, financial and tax due diligence;
2. receipt of material third-party, landlord, lender and regulatory consents, where required;
3. release or agreed treatment of disclosed charges and encumbrances;
4. execution of ancillary deeds, assignments and novations;
5. no material breach of Seller warranties before Closing; and
6. such other conditions as are specified in Schedule F.

9. Assumed Liabilities

The Buyer shall assume only those liabilities expressly identified in Schedule G ("Assumed Liabilities"), to the extent such assumption is legally effective. No other liability shall be deemed assumed merely because it relates to the Business.

10. Retained Liabilities

Except for Assumed Liabilities, the Seller shall remain responsible for liabilities attributable to ownership or operation of the Business before Closing, including undisclosed debts, pre-Closing taxes, employee dues accrued before Closing and claims arising from pre-Closing acts or omissions, subject to the specific allocation agreed between the Parties and applicable law.

11. Inventory and Stock Verification

The Parties shall jointly verify inventory as of Closing. Obsolete, damaged, expired or unsaleable stock shall be treated in accordance with Schedule H. Any agreed stock-value adjustment shall be reflected in the final Purchase Price.

12. Contracts, Customers and Suppliers

The Seller shall use reasonable efforts to obtain consents required to assign or novate material contracts. No contract requiring third-party consent shall be treated as effectively assigned solely by this Agreement where applicable law or the contract requires consent.

13. Business Premises

If the Business operates from rented, leased, licensed or owned premises, the legal right to occupy or acquire those premises shall be dealt with separately in Schedule I and through any transfer deed, assignment, lease, licence, landlord consent, registration or other instrument required by law.

This Agreement does not by itself transfer title to immovable property unless the applicable legal requirements for such transfer are independently satisfied.

14. Intellectual Property and Goodwill

The Seller shall transfer the intellectual property and goodwill expressly listed in Schedule A, subject to applicable law and any registration or recordal requirements. The Seller shall execute further assignments reasonably required to perfect the Buyer's title.

15. Employees

Employees proposed to continue with the Business shall be identified in Schedule J. Their transfer, fresh appointment, continuity, accrued benefits, statutory dues and employee communications shall be handled in accordance with applicable labour and employment laws and the agreed transaction structure.

16. Books, Records and Data

The Seller shall provide business records reasonably necessary for continuity of the Business, subject to legal retention requirements, confidentiality obligations and applicable privacy and data-protection law. Personal data shall be transferred only where there is a lawful basis and appropriate notice, consent or other compliance step where required.

17. Seller's Representations and Warranties

The Seller represents and warrants, subject to the Disclosure Schedule, that as of execution and Closing:

1. the Seller has authority to enter into and perform this Agreement;
2. the Seller has valid title to the Transferred Assets except as disclosed;
3. material encumbrances have been disclosed;
4. material litigation, notices and investigations relating to the Business have been disclosed;
5. material taxes and statutory dues relating to periods before Closing have been disclosed;
6. material contracts and employee obligations have been disclosed; and
7. information supplied for due diligence is not knowingly false or materially misleading.

18. Buyer's Representations and Warranties

The Buyer represents that it has authority and financial capacity to enter into and perform this Agreement and that execution and performance do not violate any binding obligation applicable to the Buyer.

19. Conduct Before Closing

Until Closing, the Seller shall operate the Business in the ordinary course, preserve material assets and relationships, and not dispose of material Transferred Assets or incur extraordinary obligations outside the ordinary course without the Buyer's prior written consent, except as disclosed or agreed.

20. Restrictive Covenant and Goodwill

To the extent legally enforceable in connection with the sale of goodwill, the Seller agrees that for ____ years and within ________________, the Seller shall not carry on or participate in a business competing with the Business sold, subject to Section 27 of the Indian Contract Act, 1872 and other applicable law.

The geographic scope, duration and activity restriction should be specifically tailored and should not exceed what is legally permissible.

21. Confidentiality

Each Party shall keep confidential non-public commercial, financial, technical, customer and transaction information received from the other, except where disclosure is required by law, a regulator, court, tax authority, professional adviser, lender or for implementation of the transaction.

22. Indemnity

Subject to agreed limits, exclusions and procedures, the Seller shall indemnify the Buyer against losses arising from breach of Seller warranties, Retained Liabilities and undisclosed pre-Closing liabilities. The Buyer shall indemnify the Seller against losses arising from breach of Buyer warranties and Assumed Liabilities arising after Closing.

23. Limitation of Liability

The Parties may specify a liability cap, threshold, claim period and exclusions in Schedule K. Nothing in this Agreement excludes liability that cannot lawfully be excluded or limited.

24. Termination Before Closing

This Agreement may be terminated before Closing by mutual written consent, for material uncured breach, failure of a non-waived Condition Precedent by the Long Stop Date, or in another circumstance specified in Schedule L. Consequences of termination, including treatment of any advance, shall be stated in Schedule L.

25. Further Assurances

After Closing, each Party shall execute such further lawful documents and do such further acts as are reasonably necessary to give effect to the transfer contemplated by this Agreement.

26. Notices

Notices shall be in writing and delivered personally, by recognised courier, registered post or electronic communication providing a record of transmission to the contact details stated in this Agreement.

27. Dispute Resolution and Arbitration

The Parties shall first attempt in good faith to resolve disputes through negotiation. If unresolved within 30 days after written notice of dispute, the dispute shall be referred to arbitration by a sole arbitrator mutually appointed by the Parties in accordance with the Arbitration and Conciliation Act, 1996.

The juridical seat of arbitration shall be __________, India. The language shall be English / __________. Courts having jurisdiction in accordance with the agreed seat and applicable law shall have jurisdiction over applications arising from the arbitration.

28. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of India.

29. Entire Agreement, Amendment and Severability

This Agreement together with its Schedules constitutes the entire agreement concerning the transaction and supersedes prior discussions relating to the same subject matter. Any amendment shall be in writing and signed by authorised representatives of both Parties. If a provision is held invalid, the remaining provisions shall continue to operate to the extent legally possible.