Due diligence checklist: business purchase

When do I use this document?

• for the appointment of an individual to provide consulting services through a service company
• for a fixed term appointment or an appointment terminable on notice

What are the key features?

• 24 clauses over 16 pages
• time-based appointment for a fixed term, terminable by notice by either client or consultant
• service performance obligations on the consultant company, including for performance of the services by the named individual
• consulting fees on the basis of time spent at an agreed contractual rate
• ownership of intellectual property rights arising from the services
• status of the consultant as an independent contractor
• early termination for breach and other circumstances

What else do I need to know?

Often, this type of Consultancy Agreement is also accompanied by a letter from the named individual to the client.  This will contain undertakings from the individual directly to the client covering the following:

• that the individual owns the service company and will continue to do so
• that the individual will be employed by the service company by the individual
• that the client will own intellectual property rights in materials/work product generated by the individual
• that the individual will be responsible for the service company’s performance of the consultancy agreement

We have a form of this side letter available – see

• Consultancy Agreement: company (individual side letter)

What other documents are available?

For a form of consultancy for a service company on a project basis, see

• Consultancy Agreement: company (project-based)

For forms of consultancy agreement with an individual consultant, see

• Consultancy Agreement: individual (time-based)
• Consultancy Agreement: individual (project-based)