There are exceptions, as some contracts stipulate that a Consumer Mobile Number Database change in ownership of the business will be considered an assignment of the contract. If such a 'change of control' clause exists in the contract, the same issues will arise as with an asset transaction. Performing due diligence and having legal counsel thoroughly Consumer Mobile Number Database review all of the company's contracts will be critical to determine the available options. 2. Covenant Not to Compete (CNTC) A covenant not to compete (CNTC) is a contractual condition by which the seller promises to refrain from conducting business or professional activities Consumer Mobile Number Database of a nature similar to those of the business being sold.
In a contract for the sale of a business, a reasonable value can be allocated to a 'covenant not to compete' which is generally enforceable provided it is Consumer Mobile Number Database reasonable and limited as to time and territory. The buyer may amortize this amount over 15 years even though the actual term of the CNTC is usually much shorter. For this reason, buyers often prefer a larger amount be allocated to tangible assets or a consulting agreement with a Consumer Mobile Number Database shorter useful life. In order to be legally binding, it is recommended that some consideration is allocated to a CNTC. 3.
Consulting Agreement Depending upon the Consumer Mobile Number Database goals of the seller/buyer and the complexity of the business being sold, the seller could be retained as an independent consultant. The consulting agreement should specify the Consumer Mobile Number Database schedule of time (days or hours involved), type of training or services provided, the length of the agreement, and compensation. This is a popular structuring method which Consumer Mobile Number Database can benefit both the buyer and seller. For example, the sales price could be lowered in exchange for a lucrative consulting contract.