Completing the sale of your business is a major milestone. In this article, we’ll explain the last step—the closing process that will take place—and what you’ll be expected to bring to finalize the deal.
What will take place in the closing meeting?
The purpose of this meeting is to finalize the sale. You, the buyer, and the buyer’s attorney will meet to sign and exchange paperwork to complete the transfer of your business.
Negotiations won’t take place at this point in the process. Instead, they’ll occur in the days and weeks leading up to the formal closing. The closing meeting is a separate step that brings the entire sales process to completion.
What will I need to bring?
Plan to bring the following items for completing the sale of your business:
Bill of sale.
You’ll need to provide the buyer with written documentation of the sale of your business. At a minimum, the bill of sale should include:
- The buyer’s name
- The terms of the sale
- The price the buyer paid
- The date of its transfer from you to the new owner
- The location where the sale took place
Documentation of the agreed purchase price.
Bring a signed copy of the sales agreement. This document should have been drafted by the buyer’s attorney and then signed by the buyer after you completed your final negotiations.
A signed non-compete agreement (if applicable).
The buyer may require you to sign a non-compete agreement to ensure you won’t attempt to open a competing business in the same market. Review and sign the agreement the buyer provides.
A signed employment agreement (if applicable).
If you plan to remain employed by the business after the sale, bring (or prepare to sign) the employment or consultant agreement the buyer provides.
Your lease agreement (if applicable).
If any leased real estate will be transferred in the sale, bring a copy of the current lease agreements you have in place. The new business owner may need these records to revise the lease agreement and put the obligation in their name.
Vehicle titles (if applicable).
Provide the new owner with the title to any vehicles you offer in the sale. These titles will be essential for transferring their ownership.
Transfer paperwork for intellectual property (if applicable).
If intellectual property is being licensed or assigned through the sale, you’ll need to complete and sign transfer paperwork. Expect the buyer’s attorney to prepare these documents.
Franchise transfer paperwork (if applicable).
If you’re selling a franchise, you’ll likely need to complete and sign transfer paperwork that your franchisor provides.
Settlement statements, receivables, and payables reports.
Your attorney can help you prepare prorations based on payoff letters, balance sheets, and profit-and-loss statements and offer an up-to-date record of the accounts receivable and payable you’ll pass along to the buyer.
What else will occur?
The new owner may need to work through other documents relevant to the sale of the business. These could include:
- IRS Form 8594 to document the assets they receive in the transfer and their value.
- Paperwork to be filed with local tax authorities that verifies the transfer of business inventory
You’ll also ensure that your utilities, phone lines, credit card machines, employment contracts, vendor contracts, and sales contracts are transferred to the buyer and that the buyer has attained the licenses they need to run the business. You’ll also share the locks and keys of your business.
Your attorney can advise you of any additional documents, notes, or agreements you should bring along or have prepared for closing on your new business.
Would you like to connect with an attorney? Start here:
What happens next?
The business will transfer to the new owner, but you still have some obligations to meet.
First, you’ll need to file copies of the documents that were signed and exchanged in the transfer process. Our guide, Recordkeeping After Closing Your Business, can help you take on this task.
Next, you’ll need to fulfill any post-sale training or support obligations that were specified in your contract. Read The Role You Must Play in Post-Sale Training and Support for insight into this step.
If your sale was an asset sale, you’ll also need to take steps to close your business. You can find a wealth of resources on this topic in our Close Your Business library.
Finally, you’ll need to fulfill your final tax obligations. Read Navigate Your Final Tax Filings for Your Small Business for advice on getting started.
We can help you take on these tasks. Log into your owner’s portal to get started.