There are 2 basic entity forms that are used for small businesses. An S-Corporation (S-Corp.) and a Limited Liability Company (LLC). Each offers the owner ("shareholder" for S-Corp, and "member" for LLC) the benefits of limited liability - what this means is that if the company incurs a debt or obligation, the owner's personal assets are not at risk. (There are a couple of exceptions: (1) if the owner signs a contract as a "personal guarantor" - meaning they agree to pay if the company defaults (usually required by landlords and large suppliers); or (2) if the owner causes their own tort (for example, the owner is driving the company car and gets in an accident, both the company and the owner are liable); and (3) if the company is undercapitalized, there is a theory called "veil piercing" but this does not apply very widely and if you carry reasonable insurance for your company, this will not be an issue.
Between the two, I generally recommend an LLC over an S-Corp. as the LLC is much more flexible than the S-Corp ("corporations are like lobster traps, they are easy to get into, uncomfortable to live in, and impossible to get out of"), but for some owners this is a better tax option (you are going into business to make money, so you should be working with your accountant to see what the best after tax return will be for you and your total financial portfolio - this is not the same for everyone).
You will want to work with a business lawyer to draft your governing documents. It is easy to find these documents cheaply online or in your local office supply store, but the ones you find at a bargain rate are simply a regurgitation of the state's corporate code - you are missing out on all of the personalization available (particularly for the LLC structure) that can add financial benefit (shifting tax/income/asset liability) and creating mechanisms to deal with future disputes, dissolution rights, etc. - all of which can save you huge amounts of money in the future.
Regarding your need to review the purchase agreement - you must hire a local attorney to provide you with this formal legal advice. This is a "general legal information" forum only, and we cannot provide you with specific or formal legal assistance such as this (that is the formal practice of law which requires a local attorney).
You can find local attorneys using the State and local Bar Association directories, or private directories such as www.AVVO.com; www.FindLaw.com; or www.Martindale.com (I personally find www.AVVO.com to be the most user friendly).