Make Offer

Present Your Offer

At this point, you present the seller with an outline of an offer that should clearly be marked as non-binding. This is an informal document that does not require an attorney to draw it up or review it; if the seller rejects the proposal, you have saved several thousands of dollars in legal fees.

The purpose of the non-binding offer is to provide the seller with an outline of your purchase requirements for review and comment. Every deal is a “living deal,” which means you should be open to changes suggested by the seller. Remember that you will need the seller’s cooperation for weeks if not months to come; if he or she feels cheated, you will regret it. Your non-binding offer should include the following elements:

1.      Statement that this is an asset purchase, not a stock purchase*

2.      Purchase price

3.      Method of payment

4.      List of assets that are included

5.      Conditions such as assignment of leases and contracts

6.      Conditions of employment contracts with key employees

7.      Conditions of the seller’s continued employment with the new owner, including payment and time period (penalties for failure to comply should not be discussed at this point and can be added to the actual employment agreement)  

8.      Proposed closing date of transaction *Under all circumstances, you need to structure the transaction as an asset purchase. Purchasing stock in the seller’s company carries great liability, and lawyers tend to kill deals when trying to implement the remedies.