Purchase Agreements for e-commerce businesses for sale in Orange County are either Asset Purchase Agreements, Stock Purchase Agreements or LOI’s (Letters of Intent). There are effectively two choices when buying or selling a business with respect to purchase agreements. A buyer can opt to have their attorney draft the purchase agreement from scratch or use a standardized purchase agreement such as the one created by the California Association of Business Brokers (CABB).
While some buyers may initially find comfort in using an attorney to draft a custom agreement for the transaction, the feeling will be gone when they receive the bill. The cost for an attorney to draft a purchase agreement or LOI will certainly be several thousand dollars and if there are revisions and amendments as a result of negotiations that bill will continue to climb. On one transaction in which the buyer insisted on using an attorney to draft an LOI and the purchase agreement their legal fees were over $40,000. While this is an extreme example, once they went down this path there was no turning back. The transaction was successful, just very expensive on their part. Pacific Business Sales specializes in selling e-commerce businesses in Orange County for max value.
Thousands of businesses are sold every year and while the businesses are all very different, the transaction process is the same for each business. Much like CAR (California Association of Realtors) created standardized purchase agreements and associated forms, CABB (California Association of Business Brokers) has done the same for business sales.
The CABB purchase agreements were drafted by attorneys that are Associate Members of CABB alongside CABB’s most experienced Business Brokers. Their objective was to produce standardized agreements for business sales likened to residential and commercial real estate purchase agreements produced by CAR and AIR (Association of Industrial Realtors).
Using the standardized agreements are advantageous in four ways
At Pacific Business Sales we use the standardized CABB forms and purchase agreements for practicality, consistency, and legal cost savings for the buyer and seller. The CABB forms and agreements are written by attorneys and experienced business brokers specifically for small-midsize business sales. The forms are comprehensive and many buyers on straightforward transactions opt not engage an attorney. We advise clients to have their attorney review the purchase agreements if they have any legal questions that would need to be addressed by an attorney.
Where an attorney is especially useful and required is preparing specific agreements such as a consulting agreement with the seller. We also recommend sellers have their attorney draft the seller note and security agreement.
At Pacific Business Sales our goal is making the transaction go in a smooth and timely manner.. We walk buyers and sellers through the selling process from beginning to end, explaining every step of the transaction. For the latest news, including COVID relief for e-commerce business sales in Orange County, read our blog.