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I have a question related to business. One of a person want

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I have a question related...
I have a question related to business.

One of a person want to sell portion of her business which majorly includes Vendor ID(Master Service Agreement) where she has some business and keep other portion of the business intact.

My questions is:
1. Can I just buy portion of the business which is Vendor agreement of her client.
2. If yes, Client Vendor ID is dependent on company's Tax ID, is there a way to mitigate that? Can I just own subsidiary of the company or a DBA of a company and she owns main company. She is willing to sign document that she does not have interest.
Submitted: 4 years ago.Category: Business Law
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6/1/2013
Business Lawyer: Law Pro, Attorney replied 4 years ago
Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24,870
Experience: 20 years experience in business law - sole proprietor, partnership, and corporations
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Welcome to JustAnswer! My goal is to do my very best to understand your situation and to provide a full and complete excellent answer for you.

My name is Fred and I'm going to assist you with your question.

Please bear with me if you believe my answer isn’t coming fast enough because I’m also working with other customers too. I apologize for any seemingly late response.

A master service agreement is a contract reached between parties, in which the parties agree to most of the terms that will govern future transactions or future agreements. A master agreement permits the parties to quickly negotiate future transactions or agreements, because they can rely on the terms of the master agreement, so that the same terms need not be repetitively negotiated, and to negotiate only the deal-specific terms.

Is that what you're talking about taking over as to her business?

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Customer reply replied 4 years ago

Yes...9nce master service agrement is sign, this client gives company a vendor id by whoch they can do business. As this is very big client, to get vendor is is practically very difficult and that's why I want to buy it

Business Lawyer: Law Pro, Attorney replied 4 years ago
OK.

My questions is:
1. Can I just buy portion of the business which is Vendor agreement of her client.

Yes, certainly. You just need to reach an agreement with her as to the price and how payment will be made AND that the Master Agreement is assignable to you IF you don't buy the entire business but just a portion thereof.


2. If yes, Client Vendor ID is dependent on company's Tax ID, is there a way to mitigate that? Can I just own subsidiary of the company or a DBA of a company and she owns main company. She is willing to sign document that she does not have interest.


A company's tax ID or their EIN # is individual to them only - you would have to buy the "business" and not just a portion thereof to be able to use the existing tax ID.

A subsidiary company, subsidiary, or sister company is a company that is completely or partly owned and partly or wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a government or state-owned enterprise. The controlling entity is called its parent company, parent, or holding company.

Since that's not how you envisioned ownership - that can't be done.


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Customer reply replied 4 years ago

Thank you for you quick response. Can I create a leagal document where I can say the all the profit and loss for the petticoat client is mine, in other words I want to own her client business while she owns the company

Business Lawyer: Law Pro, Attorney replied 4 years ago
Yes, but why not then buy the business from her. To be honest - I wouldn't agree to that if I were her - continuing liability and not getting any profits. So I doubt very much that she would agree to that. If I represented her I would most certainly advise her not to agree to that.
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Customer reply replied 4 years ago

She cannot sell business because it is pretty big but she doesn't have bandwidth to give justice to client, how will I just buy asset in wa state

Business Lawyer: Law Pro, Attorney replied 4 years ago
There are 2 ways to buy a business - buy it's shares or buy it's assets.

In an asset purchase, you are acquiring specific assets belonging to the corporation, therefore title to the assets changes from the corporation to the purchaser. The purchased assets could compromise all of the assets and undertaking of the business, or they may consist of select assets.

Here, there is flexibility as to which assets may be acquired and which liabilities of the business may be assumed. A purchaser could choose to purchase only assets and not assume any liabilities of the business.

However, in a share purchase, a purchaser cannot select which assets it wishes to purchase and which liabilities it wishes to assume. It must acquire the entire undertaking of the corporation, since ownership of the corporation’s shares ultimately result in indirect ownership all of the corporation’s assets and undertaking, including liabilities.



Given that she only wants to sell this part of the business - you would be doing an "asset" purchase.

Here is a sample asset purchase agreement which you can modify for your use and change the facts, names, etc:

BUSINESS ACQUISITION AGREEMENT

This agreement ("Agreement) is made this {date} of {month}, {year}, by and between {name of seller}, hereinafter known as "Seller," and {name of buyer}, hereinafter known as "Buyer," for the purchase of {business name}, hereinafter known as the "Business," and all related assets.

Buyer and Seller both agree to the following provisions as conditions for the sale of the Business:

1. Purchase Description-Assets and Liabilities

Buyer is purchasing the following assets from Seller:

{Here is where the assets should be listed. If this is simply a sale of assets, and Seller is retaining name rights only to the business/corporation, please note that here. Otherwise, make a list, including value, of each asset which will be sold to the Buyer from the Seller. If necessary, reference "schedules," or attachments, and include them with this document, with the understanding that both parties are signing off on the schedules as well as the provisions listed here. The list of assets may be done in any way, but a convenient method might be to include a simple table with the details. See sample table below.}

ASSETS

VALUE

Customer accounts

$200,000

Inventory/Goods

$150,000

Rental Properties

$75,000

Equipment

$95,000

Intellectual Property

$50,000

Building(s)

$350,000

 

 

 

{also be sure to include, if applicable, that Buyer will receive title(s) to any properties the Seller will be purchasing, as well as how the transfer of customer accounts, if any, will proceed}

{after listing the assets, you must also include a list of liabilities, if any, that the Buyer will be assuming from the Seller. Again, using a table is an efficient way to accomplish this task.}

DEBT

AMOUNT

Mortgage/Lease

$100,000

Advertising Contract

$10,000

Equipment Rental Contract

$30,000

 

 

 

 

 

 

 

2. Purchase Price

Owing to the total value of the assets and liabilities listed in Section 1, as well as{any other considerations that fall within the purchase price}, the total purchase price of the Business is {amount in dollars}, which will be paid in the following manner:

{here you outline the details of the payment plan, including whether it will be paid in cash, in installments, whether interest and/or late fees will be added, etc.}

 

 

 

3. Competition

Seller agrees that for a period of {length of time}, {he/she} will not engage in any activities related, directly or indirectly, to the Business, and will not attempt to solicit business or services from any customers, clients, etc. who originally were such during the Seller's ownership of the Business. This non-compete clause applies to {name the geographic region, such as the state, tri-state area, nation, etc.}.

 

 

 

4. Indemnity

If either party is found to be in breach of this Agreement, the offending party will indemnify the offended party for any legal fees accrued as a result of the breach. Lost profits incurred as a result of any such breach {will/will not} be repaid by the offending party.

5. Severability

Should any provision in this Agreement be deemed in some way invalid, the remaining provisions shall remain intact and enforceable by law.

6. Jurisdiction

This Agreement shall be governed by the laws and regulations of the state of {State Name}.


Both parties agree to the provisions listed above, as well as any applicable schedules or attachments included with this Agreement.


Signed this {date} of {month}, {year}.



___________________________ __________________________
Seller Name Seller Signature


___________________________ __________________________
Buyer Name Buyer Signature



___________________________ __________________________
Witness/Legal Representative Name Witness/Legal Representative Signature

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Business Lawyer: Law Pro, Attorney replied 4 years ago
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