Business Acquisition · Template #5 of 10
The Seller Disclosure Schedule is the document where sellers list every exception to their representations and warranties in the Asset Purchase Agreement. A thorough, accurate disclosure schedule protects sellers from post-closing indemnification claims — if it's disclosed, the buyer cannot claim it was an undisclosed breach. An incomplete disclosure schedule is a major liability for sellers.
Seller: [SELLER LEGAL NAME] Business: [BUSINESS NAME] Date: [DATE] Reference: This Disclosure Schedule is attached to and incorporated into the Asset Purchase Agreement dated [DATE] between [SELLER] and [BUYER]. INSTRUCTIONS: For each schedule number below, list all exceptions to the corresponding representation or warranty. Write "NONE" if no exceptions apply. Leave no schedule blank.
[List all equipment, machinery, furniture, vehicles, and fixtures included in the sale. For each item, provide:] - Description - Approximate age and condition (Good / Fair / Needs repair) - Estimated fair market value - Any liens or encumbrances EXAMPLE: 1. 2019 Ford Transit cargo van, VIN [XXX], 87,000 miles, Good condition, FMV ~$22,000. No liens. 2. Tormach 1100 CNC Mill, serial #[XXX], 2021, Good condition, FMV ~$35,000. Lien to [BANK NAME], payable in full at closing. [Continue list...]
[List all IP included in the sale:] Trademarks: - [MARK NAME], Reg. No. [XXX], registered [DATE], covers [goods/services description], owned by [ENTITY] - [Note any trademarks registered in owner's personal name — must be assigned] Domain Names: - [domain.com] — registered through [REGISTRAR], expires [DATE], registered to [NAME/ENTITY] - [Note if any domains are registered in personal name] Social Media Accounts: - [Platform]: @[handle] — [current follower count], owned by [confirm Business entity or personal account] Software/IP Owned: - [DESCRIBE any proprietary software, apps, or databases] Exceptions to IP Representations: - [List any third-party claims, disputes, or licenses that limit IP rights]
[List all liens, mortgages, UCC filings, or other encumbrances on Purchased Assets] EXAMPLE: 1. UCC-1 Financing Statement filed [DATE] by [LENDER], covering all business assets, securing a line of credit with outstanding balance of $[AMOUNT]. Will be released at closing from sale proceeds. 2. Equipment lien on [EQUIPMENT DESCRIPTION], filed by [LENDER], balance $[AMOUNT], payable at closing. NONE — if no liens exist, write NONE here.
[List all contracts that require third-party consent for assignment:] EXAMPLE: 1. Commercial lease — [LANDLORD NAME] consent required per Section [X] of lease dated [DATE]. Seller to seek consent by [DATE]. 2. Customer Master Services Agreement with [CUSTOMER NAME] — contains change-of-control clause requiring consent. Seller to notify [CUSTOMER] by [DATE]. 3. Software license with [VENDOR] — personal license, not transferable. Buyer will need to obtain new license at closing. Note any consents already obtained: [LIST]
[List all employees and material HR matters:] EMPLOYEES: Name | Title | Start Date | Annual Comp | Benefits | Employment Type (FT/PT/Contract) [ROW 1] [ROW 2] [Continue...] MATERIAL EXCEPTIONS: - Pending HR matters: [DESCRIBE or write NONE] - Workers' compensation claims (open): [DESCRIBE or write NONE] - OSHA incidents (last 3 years): [DESCRIBE or write NONE] - Independent contractors with potential misclassification risk: [DESCRIBE or write NONE] - Non-compete agreements binding on employees: [LIST or write NONE] - Promised bonuses, commissions, or profit-sharing not yet paid: [DESCRIBE or write NONE]
[List ALL pending, threatened, or recently resolved litigation, arbitration, regulatory actions, or claims:] EXAMPLE: 1. [CLAIMANT] v. [BUSINESS NAME], [COURT/ARBITRATION FORUM], Case No. [XXX], filed [DATE]. Claim: [DESCRIBE — e.g., "breach of contract, seeking $50,000"]. Status: [Pending / Settlement discussions / Judgment for $X on [DATE]]. 2. OSHA investigation opened [DATE] re: [DESCRIBE]. Status: [Resolved / Pending]. NONE — if no litigation exists, write NONE. Also disclose any formal demand letters, government investigations, or regulatory notices received in the last 36 months.
[Disclose all known environmental conditions, violations, or investigations:] EXAMPLE: 1. Phase I ESA conducted [DATE] by [FIRM] — identified recognized environmental condition (REC) related to [DESCRIBE]. Phase II assessment completed [DATE] — results: [DESCRIBE]. Remediation status: [DESCRIBE]. 2. Hazardous waste disposal conducted through [VENDOR] — records available upon request. 3. No underground storage tanks on any property leased or owned by the Business. NONE — if no environmental issues, write NONE.
[This section captures any material facts not covered by the specific schedules above. Sellers should include anything a reasonable buyer would consider important:] Examples of items to disclose here: - A major customer has verbally indicated they may reduce orders post-sale - A key employee has given informal notice of intention to leave - Pending price increases from a major supplier - Technology platform (critical to operations) is being discontinued by vendor in [DATE] - Any seasonal or cyclical factors that affect revenue timing - Any known or anticipated regulatory changes affecting the Business - Owner health or other circumstances that may have affected recent operations Seller certifies that this Disclosure Schedule is complete and accurate as of the date hereof and will promptly notify Buyer of any material changes prior to closing. ______________________________________ [SELLER SIGNATURE] Date: _______________
Using templates as a starting point is smart. Having an attorney review or customize them for your specific deal and state is essential. Connect with a vetted business acquisition attorney through Contracts Counsel.
Find a Business Attorney →The Disclosure Schedule lists every exception to the seller's representations and warranties in the purchase agreement. If a seller represents that "there is no pending litigation" but there is a pending case, that exception must appear in the Disclosure Schedule. Proper disclosure prevents post-closing indemnification claims.
Sellers should err on the side of over-disclosure. Every material fact, liability, or uncertainty should appear in the schedule. Buyers generally prefer complete information early. Failing to disclose a material item that later surfaces gives the buyer a strong indemnification claim and can expose the seller to fraud allegations.
The Disclosure Schedule is typically attached to the purchase agreement at signing and updated through a "bring-down certificate" at closing to reflect any changes between signing and closing. Any new material items that arise between signing and closing must be disclosed and may give the buyer a right to terminate or renegotiate.