Forms Needed for Selling a Business

by Eric
(Tampa Bay, Fl)

If I have a buyer that is ready to buy my business, what forms are needed? Do I need an attorney? Is it similar to the sale of property?

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Dec 22, 2008
Forms Needed to Buy a Business
by: Ron

Hi Eric - Thanks for the question. Many business owners are approached with an offer to buy a business even when the business is not for sale. The laws governing the sale of a business differ from state to state so you should check with your state to see how "bulk sales or business sales" are treated. Most often people are surprised that there are not really that many forms needed - there is not nearly as many boiler plate forms like in real estate.

Each situation is different but the main from or document needed is a purchase agreement. This is where the buyer and seller identify what is being sold and for how much. In the agreement there should be language that speaks to when and how payment will be made. If there is a period of due diligence a time period for that should be identified. Also a closing date should be identified. If the buyer wants the seller to train them for some time that should be agreed to early.

Some other documents that are often created include: A covenant not to compete, a purchase price allocation (IE how much or the purchase is equipment and how much is goodwill) and possible a post sale employment agreement from the buyer to the seller.

In some state escrow companies can handle the documents and deal with things like UCC lien searches and publishing requirements. In other states attorneys handle this. I would try to find a "transactional attorney". They act as the middle man and represent both sides.

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