What type of legal contracts are involved with Selling your Internet Business?
Selling a website business is a complex process that can be confusing to buyers and sellers that don't have experience with internet business transactions. A website broker can help guide both the buyer and seller every step of the way through the entire process to sell a website or buy a website. There are many types of legal contracts involved with selling an internet business and a professional website broker can provide boilerplate versions of theses legal contracts to help avoid unnecessary attorney legal fees. During the initial consultation between the seller and website broker, some sellers require that the broker sign a non-disclosure agreement between website broker and seller to protect confidential information that is disclosed during the initial consultation. After the seller officially hires the ecommerce business broker, the seller is required to sign an exclusive listing agreement that gives the ecommerce business broker an exclusive right to represent the seller's website in the sale. After the website broker officially lists the internet business on the market, the website broker will require all perspective buyers to sign a non-disclosure agreement between the broker and buyer that protects confidential information that will be disclosed by the seller throughout the entire process. Having the buyers sign a non-disclosure is a fundamental step that needs to be completed before the ecommerce business broker provides the company prospectus to the perspective buyer. After the buyer completes their initial investigation into the internet business, the next step is for the buyer to submit a letter of intent. Most website brokers have a boilerplate Letter of Intent agreement that are tailored specifically to internet based business transactions and this agreement can be completed by the buyer by inputting the financial terms of the offer they are presenting.
After the website broker presents the letter of intent to the seller and both parties sign off, the due diligence phase begins and the buyer and seller work with the website broker to prepare a final asset purchase agreement. The asset purchase agreement usually also includes a non-compete agreement and a promissory note agreement. The asset purchase agreement outlines the financial terms of the sale and the responsibilities of the buyer, seller and website broker. The non-compete agreement, which is usually attached as an exhibit to the asset purchase agreement will cover the details of the seller's responsibility not to compete against the business post transition. For the deals that include seller financing, a promissory note agreement is also required and usually attached as an additional exhibit to the asset purchase agreement. The promissory note agreement will detail the terms of the seller financing structure and the payment schedule for the financed payments. Collectively, these agreements represent the fundamental agreements that should be provided by the website broker advising on the transaction. In more complex transactions, there might also be employee agreements, supplier transfer agreements, lease agreements and more. It's always recommended that sellers work with a professional website broker and an attorney that have experience with internet business transactions.