The peo­ple in the busi­ness are just as impor­tant as the assets, stock, or mem­ber­ship inter­est. Some­time the buyer will want to keep an owner as a con­sul­tant, a part-time or full-time employee, or an advi­sor. The buyer might want to con­sider a tran­si­tion period for an owner. This require­ment can either be included in the busi­ness sale agree­ment or nego­ti­ated sep­a­rately. If an ex-owner becomes an employee, then treat him or her as you would any other employee by pro­vid­ing an employ­ment con­tract or an at-will offer. Make sure to spec­ify their duties. If the ex-owner is a con­sul­tant, then make sure to nego­ti­ate an inde­pen­dent con­trac­tor agreement.

Some­times the busi­ness will have key employ­ees that the buyer wants to keep. If the key employee has a con­tract, the buyer might just take over their con­tract. If it’s an entity sale, the con­tract will auto­mat­i­cally be part of the deal. If it’s an asset sale, then the par­ties need to get proper con­sent to assign the con­tract to the buyer.

Some­time the seller’s own­ers will have no part in the busi­ness once it trans­fers to the buyer. If this is the case, the buyer should con­sider a non-compete agree­ment to pro­tect itself from future com­pe­ti­tion. The seller might start a com­pet­ing busi­ness or work for a com­peti­tor. The non-compete nor­mally cov­ers a geo­graphic area (these days that might include the inter­net), the type of activ­i­ties, and the dura­tion of the non­com­pete. The non-compete can be part of the busi­ness sale agree­ment or a sep­a­rate document.