In its simplest form, the sale of a sole proprietorship could have provisions similar to the following:

I.         In consideration of the mutual promises and covenants of the parties, Seller sells, assigns, transfers, and conveys to Buyer all the stock of goods, furniture and fixtures, accounts, and office supplies, including also the lease of the building occupied by Seller at (street address, city, county, state, zip code).

II.        The consideration for these assets is $_____________, receipt of which is acknowledged by Seller. The proration of the consideration is as follows:

A.        Furniture and fixtures: $___________________.

B.        Stock of Goods: $________________________.

C.        Office supplies: $ ________________________.

D.        Accounts receivable: $ ____________________.

E.         Lease: $_________________________.

             Total: $__________________

III.      Buyer, and its successors and assigns, shall have and hold the property forever. Seller covenants with purchaser that the property is free from all encumbrances; Seller has the legal right to transfer and sell the property; and Seller will defend the title to the property against all persons. It is further a part of the consideration of this transfer that the name of Seller or any part of it shall not be use by Buyer in the operation of the business subsequent to this transfer nor will the name be sold or transferred by Buyer to any other person or persons. This restriction shall not be construed to prohibit the designation by Buyer that it is the successor to Seller.

Often such an agreement will contain a covenant not to compete similar to the following:

Seller shall not, either directly or indirectly, alone or with others, enter into or engage in the (type of nature of business) business within (restricted area, such as city or certain number of miles from business being sold)  for a period of  ____years from the date of execution of this agreement. Further, seller shall not, during that period divulge, communicate, use to the detriment of buyer or for the benefit of any other person or persons, or misuse in any way, any confidential information or trade secrets of the business sold under this agreement, including customer lists, personnel information, and secret processes or other technical data.

For such a covenant to be enforceable it must be: (i) necessary to protect a business; (ii) reasonable in time; and (iii) reasonable in the geographic scope (i.e., the territory covered).

The same matters should be considered in the sale of a business owned by a partnership as in the sale of a sole proprietorship. The contract of sale should distinguish the transaction as a sale of assets rather than as a sale of partnership interests. However, the sale of a partnership interest can be accomplished with language similar to the following:

Assignor, by this instrument, assigns all of Assignor’s right, title, and interests in the Partnership, being a _____% share of the business, to Assignee. Assignor shall be relieved of any future liability for Partnership debts and shall no longer be entitled to any share of the Partnership profits or assets. Assignee shall be entitled to all future shares of the Partnership profits or any distribution of assets, in accordance with said Partnership Agreement and shall assume liability for a proportionate share of all future partnership losses in accordance with said Partnership Agreement.

The same matters should be considered in the sale of a business of a corporation or a limited liability company as in the sale of a sole proprietorship. The contract of sale should distinguish the transaction as a sale of assets rather than as a sale of stock in the corporation or membership units in a limited liability company. Of course stock in a corporation or membership interests in a limited liability company can be transferred if that is the desire of the parties.

All states have adopt some form of the Model Business Corporation Act (MBCA) or the Revised Business Corporation Act (RMBCA). Both the MBCA and the RMBCA require that the sale of all or substantially all corporate assets be authorized by the shareholders and/or directors of the corporation.