Documents Needed When Closing an Existing Business Deal



You have done your due diligence, and everything is alright so far. The last thing you have to do is close the deal. Closing the deal means the business gets transferred to you. Everything from the business assets to the ownership has to be transferred.
However, be careful that the current owner does not transfer the liabilities. So what documents do you need for the final step of buying an existing business? Here is a checklist of all the materials you need to succeed in closing the business deal.

Bill of sale

The first document you must have is the bill of sale. When you buy aged corporations, the bill of sale is a vital document to have; it will prove actual sale. It also transfers ownership of all the business assets to you.

Adjusted purchase price

The adjusted purchase price gives the final cost of purchase. You do not want the current owner to come back saying you owe him. So make sure you have this document. It includes all the expenses like utilities, rent and even inventory.

Lease

Does the business have leased property? If so, the owner will have to transfer that to you as well. If you are going to take over the lease, you have to make sure that the landlord agrees. If it is a new lease you are negotiating, you have to double-check that everyone involved understands the terms.

Vehicles

Check if the business you are buying comes with vehicles. If it does, you have to transfer its ownership with the local DMV. It is also advisable to get the right forms by the time you complete the sale.  

Intellectual property

When buying the business, you have to make sure that all the intellectual property is transferred to you. The copyrights, trademarks, and patents should all bear your name. By shifting intellectual property rights, you avoid any problem in the future.

Franchise

Are you buying a franchise? You must also check if you will be required to file the franchise documents.

Non-compete agreement

You should ask the seller to sign the non-compete agreement. The contract restricts the previous owner from setting up a competing business near yours. The deal ensures that he does not become your competitor.

Employment agreement

The employment agreement has to be drafted if the seller will remain in the company as an employee.

Asset acquisition statement

The IRS form will list all the assets you have acquired. It will also contain the amount you purchased them. The document is vital when buying an established business. It will help you when filing your tax returns.

Bulk sale laws

A bulk sale law is a document that prevents business owners from evading their creditors. Some business owners transfer ownership to someone else to avoid creditors. As a buyer, you must notify the local tax authority about your pending sale.
These are the documents you need to close the deal when buying an existing business. You must have these before the business becomes fully yours.

Comments

Post a Comment

Popular posts from this blog

Things You Didn't Know About Aged Shelf Corporations.

Image
  In a business world where established longevity and convincing operating history inform the credibility of a business, purchasing an Aged Shelf Corporation  continues to be an easy option for many entrepreneurs. The value of rich business history can never be overstated especially when it directly affects the level of confidence potential associates such as clients, suppliers, and lenders place in a business.    Here are 4 things you probably didn’t know about aged shelf corporations;   They Are Very Legal    Historically, shelf corporations were created to be sold off to individuals that wanted to start a company without going through the effort of incorporating one. This remains one of the major reasons for purchasing aged corporations together with a host of other benefits that include obtaining an established business history, and perhaps a solid credit rating. Shelf corporations are created for legitimate purposes and even come with valid VAT registra
Read more

Are Aged Corporations Legal?

Image
  Having learned the invaluable benefits of entering the market through an aged corporation , you are probably questioning the legitimacy of the whole concept. The fact that you are having doubts about a shelf corporation's legality makes you the right person to purchase a shelf corporation. It means that you are planning to use it for legitimate purposes only and wouldn’t want to be associated with something that goes against corporate laws. You wouldn’t want to pick an investment vehicle that will turn out to be financial and legal nightmare in the long run.    What is considered Illegal?    To understand whether or not aged companies are illegal, first, let’s examine what makes anything illegal? From a basic Google search, something is illegal when official laws do not sanction it. Any entity that operates contrary to set authorizations is termed illegal. By the same definition, there is nothing illegal in the registration of an aged corporation. Neither does the law forbid
Read more

Can I Buy A Shelf Corporation With Existing Line Of Credit, Tax Returns, or Financials?

Image
  By definition, a shelf corporation is a duly registered company that is kept inactive "on the shelf" to age to be sold later to an individual or a group of people. “Naturally,” shelf corps do not have any assets or liabilities given that they do not engage in business activities during the aging period. Therefore, it is impractical that a shelf corporation would come with an existing line of credit, tax returns, and declared financials.    Regardless, you will still come across shady vendors online advertising aged corporations that come with cash lines of credit, tax returns, and financials. Such aged corporations come in hefty price tags and promises of instant guaranteed funding. First, we need to establish that there is no way a shelf company can magically come with these valuable credentials after several inactivity years. Second, not even the oldest aged corporation on the shelf can guarantee your business instant funding. Aged corporations can
Read more