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A Business Purchase Agreement lays out the terms and conditions when you're buying or selling a company in Hong Kong. It covers everything from the final sale price and payment terms to exactly what assets, contracts, and liabilities will change hands. Think of it as your roadmap for the entire transaction.

This vital contract protects both buyers and sellers under Hong Kong's Companies Ordinance by spelling out key details like employee transfers, intellectual property rights, and any conditions that must be met before closing. It also addresses warranties, non-compete clauses, and how to handle disputes - crucial safeguards that make the deal legally binding and enforceable in Hong Kong courts.

Use a Business Purchase Agreement any time you're acquiring or selling a business in Hong Kong - from small retail shops to large manufacturing companies. This agreement becomes essential when negotiating the final terms, especially for transactions involving assets over HK$1 million or deals that include intellectual property rights.

The timing is critical: put this agreement in place once you've agreed on the basic deal structure but before any money changes hands or assets transfer. It's particularly important when dealing with regulated industries, family-owned businesses, or companies with multiple shareholders under Hong Kong's Companies Ordinance. Having it ready before due diligence helps avoid costly disputes later.

• Contract For Sale Of Business: The standard comprehensive Business Purchase Agreement used for complete business transfers in Hong Kong, covering all assets, employees, and operations. Ideal for straightforward company sales with clear ownership structures.
• Business Settlement Agreement: A specialized version used when the business purchase involves resolving disputes or complex negotiations between parties. Often includes additional provisions for staged payments, conditional transfers, and detailed resolution terms.

• Business Owners/Sellers: Sign and provide warranties about the company's financial health, assets, and liabilities. Must disclose material information under Hong Kong law.
• Buyers/Investors: Review terms, conduct due diligence, and ensure compliance with Hong Kong's acquisition regulations. Often include private equity firms or corporate entities.
• Corporate Lawyers: Draft and negotiate agreement terms, ensure legal compliance, and protect their client's interests throughout the transaction.
• Financial Advisors: Verify financial statements, assist with valuation, and advise on tax implications of the sale structure.
• Company Directors: Approve the final agreement and ensure it aligns with fiduciary duties under the Companies Ordinance.

• Basic Details: Gather complete business registration information, company numbers, and addresses for both buyer and seller under Hong Kong law.
• Asset Inventory: List all physical assets, intellectual property, contracts, and licenses being transferred.
• Financial Records: Compile past 3 years of financial statements, tax returns, and current business valuation.
• Due Diligence: Review employee contracts, existing liabilities, and pending legal matters.
• Payment Terms: Define purchase price, payment schedule, and any earn-out provisions clearly.
• Final Review: Our platform generates a customized agreement ensuring all these elements align with Hong Kong's legal requirements.

• Party Details: Full legal names, business registration numbers, and authorized signatories of both buyer and seller.
• Asset Description: Detailed inventory of all tangible and intangible assets being transferred.
• Purchase Terms: Clear statement of price, payment method, and completion date.
• Warranties: Seller's guarantees about business condition, debts, and legal compliance.
• Employee Provisions: Treatment of existing staff contracts and MPF obligations.
• Governing Law: Explicit statement of Hong Kong jurisdiction and dispute resolution process.
• Completion Mechanics: Steps for closing, including document handover and regulatory filings.

A Business Purchase Agreement is often confused with an Asset Purchase Agreement, but they serve distinct purposes in Hong Kong business transactions. Here are the key differences:

• Scope of Transfer: Business Purchase Agreements cover the entire business entity, including goodwill, customer relationships, and ongoing operations. Asset Purchase Agreements only transfer specific assets, letting sellers retain their business structure.
• Liability Treatment: Business Purchase Agreements typically transfer all liabilities unless explicitly excluded. Asset Purchase Agreements allow buyers to choose which liabilities they'll assume.
• Employee Considerations: Business Purchase Agreements automatically transfer employment contracts under Hong Kong law. Asset Purchase Agreements require separate arrangements for staff transfers.
• Regulatory Requirements: Business Purchase Agreements need more extensive due diligence and often require shareholder approval. Asset Purchase Agreements generally face fewer regulatory hurdles.