The Closing Transaction

 

Checklist For A Smooth Closing

Business Sale Closing Transaction

Following is a brief outline summary of the key topics that should be addressed in order to execute a smooth closing. I have also added some thoughts in each that might be of help.

As a matter of policy, Gush & Associates offers each client a credit that is deducted from success fees to cover a previously agreed to amount the seller might incur for legal fees, CPA fees and title escrow fees. I believe these professionals play a necessary and productive role for every seller. Our credit is meant to encourage the seller to engage these professionals for his protection and facilitation of a successful close.


 

Preparation For Closing:

 

Work with your broker, lawyer, accountant and Title / Escrow company.


 

Schedule Your Closing Appointment:

 

Contact all parties. Keep in mind that proration of many items will need to be addressed.


 

 

Items To Prepare:

 

Finalize the purchase price

Keep in mind that it reflects prorated rents, utilities, other fees, final inventory, accounts receivables, accounts payable and all other items during negotiation.

 

Corporate documents

Consult your attorney with regard to your needs depending on corporate structure. May include corporate resolutions, etc.

 

State forms, tax forms, transfer forms

Contact your Secretary of State, Corporations Commission; transfer documents for vehicles, intellectual property; and allocation of purchase price assets.

 

Insurance

Purchase as needed.

 

FFE list

Prepare list of furniture, fixtures and equipment being sold, as well as, a list of those items excluded as negotiated.

 

Transfer contracts and agreements

Copy and document all approvals to transfer all contracts and agreements, such as, titles, leases and all obligations.

 

Work in progress

Must be identified and transferred as negotiated.

 

Account receivables, Account payables, Aging reports

Finalize.

 

Loan documents

They may include promissory notes, security agreements, personal guarantees, third party guarantees and or UCC financing statements.

 

Building lease

Assemble copies of leases, amendments, assignments and acceptance documents.

 

Personal agreements

Prepare any consulting, management and CNTC agreements.

 

Exceptions to warranties and representations

Identify, if any.

 

Succession agreements

If any, include them for employee benefit plans including profit sharing, flexible spending or other plans.

 

Bill of sale

Prepare.

 

Closing or settlement sheet

Lists all price adjustments to purchase price. An attorney or escrow agent will prepare.

 

Purchase and sale agreement

Prepare. The broker or either attorney can supply. Each should review.

 

Other

Items per broker, attorney, accountant or escrow agent.


 

 

At Closing: 

 

You will review, agree to and sign: 

  • Post-closing final adjustments to purchase price
  • Purchase & Sale agreement
  • Loan Documents
  • Lease, Vehicle, Franchise, succession, asset Transfer Documents
  • Consulting, Employment, Non Compete Documents
  • Bill of Sale
  • Business Name Transfer
  • Intellectual Property Transfer, including patents, trademarks, copyrights, etc.
  • Expense and Credit allocations
  • Closing Statements
  • Asset Allocation Statement-IRS Form 8594
  • Down payment Amount. (And Pay)
  • Broker Success Fees (And Pay)

 

If An Escrow Office Close

The escrow agent will require you will follow escrow, opening instructions, deal with obligations and contingencies, execute closing documents, transfer funds and record the sale.

 

If An Attorney’s Office Close

Attorneys prepare and review purchase and sale agreement, address obligations or contingencies, have buyer and seller execute closing documents and transfer funds.

 

Attendees At Close

They may include all owners and spouses (if community property state), buyers and spouses, third-party loan guarantors, powers of attorney, brokers, escrow agents and attorneys for each buyer and seller, and any others whose signatures are required.

 

 

 

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