Sales Process Step 9: Transfer Documents and Contingency Removal
Our legal professionals can be engaged to work with the escrow to facilitate the removal of all the contingencies and work to present the buyer's experience and financial qualifications to obtain any necessary lease assignments (or new leasing arrangements) and/or loan assumptions. Unlike the promissory note and other closing documents normally attached to the Purchase and Sale Agreement, for the most part, the documents discussed below will be prepared after the Purchase and Sale Agreement is signed at the closing.
This part of the transaction involves legally transferring ownership of business assets (in an asset sale) or ownership of an entity (in an entity sale). Because your business may own several different types of assets, you may need to use more than one document to fully accomplish this task, including:
- Bill of Sale – used to transfer ownership of most tangible assets such as furniture and fixtures, equipment, inventory, customer lists, rights to telephone and facsimile numbers and supplies. Note that you cannot transfer ownership of vehicles, which require registration; instead, ownership transfer requires the use of state-prescribed forms.
- Deeds – the transfer of real estate used by the business as part of the sale involves preparation and recordation of a deed, along title insurance to ensure the buyer is receiving clear title.
- Transfer of Business Licenses and Permits – to the extent the business operates pursuant to a license or permit issued by a state or local regulatory agency, the seller may have to assist the buyer effect a transfer of, or obtain the new issuance of, the necessary license or permit (for example, a liquor license).
- Statement Regarding Absence of Creditors – used to satisfy the buyer's requirement to verify that the seller complied with all applicable bulk sale provisions.
- Assignments – used to transfer intangible assets such as leases, employment contracts and agreements with customers and suppliers as well as intellectual property (i.e., trademarks, patents and copyrights).
- Consent Forms Approving Entity's Sale of Assets – consists primarily of a formal resolution authorizing the entity to engage in the sale of its assets.
Other Transfer Considerations include:
