The closing of a business sale is the final step in the process of selling a business – all the final matters are wrapped up and money changes hands. 

While the closing is typically attended by the buyer, seller, and their respective legal counsel, it has become more common since the pandemic for simple closings to be performed virtually and even asynchronously using DocuSign.

 Here are some of the things you can expect immediately prior to or during the closing: 

1. Finalize paperwork: At the closing, the buyer and seller will finalize all paperwork related to the sale. This may include a bill of sale, purchase agreement, take back promissory note, security agreement, and any other legal documents or tax forms.  A best practice is to circulate an informational copy of the final signature package a day or two before the closing to ensure there are no surprises at closing.  

2. Transfer of ownership: The ownership of the business will be transferred from the seller to the buyer. This may involve transferring ownership of stock or assets, such as equipment and inventory, assigning contracts, and transferring any necessary licenses and permits. 

3. Transfer of funds: The purchase price will be transferred from the buyer to the seller. This may be done through a wire transfer or a cashier’s check.  Closings involving a lender will have additional steps.

4. Settlement of liabilities: The seller will settle any outstanding debts and liabilities associated with the business. This may involve paying off loans or settling any outstanding accounts payable. 

5. Employee transition: If the buyer is taking over the business and wishes to hire its employees, there may be a process the seller to terminate employment before the buyer hires the employees. 

6. Final walkthrough: The buyer may conduct a final walkthrough of the business to ensure that everything is in order and that there are no surprises. 

7. Settlement statement: At the end of the closing, the seller and the buyer will receive a settlement statement that summarizes all of the financial transactions that took place.  They will sign off on it and confirm it is accurate.

8. Celebrate: Once the closing is complete, it’s time to celebrate! This is an exciting time for both the buyer and the seller, and it’s important to take a moment to acknowledge the hard work that went into making the sale happen. In our practice, it’s not uncommon for the parties to pop some bubbly! 

Keep in mind that the exact process for closing a business sale will vary depending on the size and complexity of the business, as well as the terms of the sale. It’s important to work with experienced professionals to ensure that the sale is completed smoothly and legally. 

We represent both Buyers and Sellers. Call us today.