Living the Dream - Selling a Business (part three - Document the transaction)
The sale of a business involves many elements- all of which should be reduced to writing. A contract should be clearly negotiated and executed by both Purchaser and Seller. The terms of the deal should be clear – including such items as:
The names of the Sellers and Purchasers;
A clear description of what is being sold (i.e., shares of stock or membership interest in a business or merely the assets of a business - - such as leases, furniture, fixtures, inventory, equipment, vendor sale or purchase agreements, databases, etc.);
The date the sale will be effective (and a time limitation on how long the contract can remain in effect before a party can claim default);
The total sales price;
Any financing structures;
The treatment of any deposit (identifying any portion that is non-refundable);
Statements as to condition of the premises and any assets at turn-over;
The treatment of any trademark or fictitious name ownership as to business names or logos associated with the business;
Any agreed upon contingent matters that must occur prior to closing on the business; and
Standard elements including such items as the State in which any contract disputes will be handled, the parties’ agreement as to attorney fees and costs in the event of a dispute and whether mediation or arbitration will be the agreed upon method of resolving contract disputes.
Developing a Contract for Purchase and Sale can be a complex transaction and may require the assistance of a business and tax attorney. For information on the tax impact of selling a business see Sale of a Business, and for business and tax assistance with the sale of a business contact Wood, Atter & Wolf, P.A., a full-service law firm with offices located in Jacksonville and Ponte Vedra Beach, Florida.
