Documents Leading to a Sale
Documents Leading to a sale of a business can be overwhelming. Most small businesses being sold in the Kansas City market are structured as a “business asset sales”. The Seller continues to control their business entity after the assets are sold. The Buyer forms a separate entity. This new entity purchases assets from the Seller. Transferring assets vs. stock has it’s advantages.
Murphy Business has been assisting buyers and sellers through this process since 1994. We have created a process for producing final documents for the Buyer and the Seller that is beneficial, economical and efficient for all parties.
Phase 1 – Documents Leading to a Sale
Offer To Purchase – This document is used to outline the basics of the transaction. The Offer to Purchase brings “a meeting of the minds” between Buyer and Seller. In simple terms, an Offer to Purchase says, “I would like to buy your business after taking a more in-depth look for a price of $_______ . This agreement normally includes contingency stipulations. A contingency is a condition in the offer that must be resolved, satisfied or rectified before the transaction moves forward. If any of these contingencies are not satisfied, the sale will generally not move forward. The Offer to Purchase Agreement states the amount of time these contingencies must be fulfilled referred to as “Due Diligence”.
Phase 2 – Documents Leading to a Sale
Closing Documents – These documents include: Standard Asset Purchase Agreement, Bill of Sale, Buyer Closing Statement, Seller Closing Statement, Closing Reconciliation, Promissory Note, Non-Compete Agreement, Employment Agreement among others. Businesses that include real estate are usually handled as a separate transaction and these transactions occur simultaneous. An attorney is hired to draft these documents from a neutral perspective thereby avoiding agreements producing an unjust advantage to Buyer or Seller. A business broker’s job is to facilitate this process and offer options for these services that best fit the buyer and seller’s needs.
The closing documents are drafted before closing. Both parties are encouraged to have these documents reviewed by their own counsel. Prior to close, a UCC search is performed to insure clear title of the assets.
Chris Kerth begins the sales process with a Free, No-Obligation Market Analysis. We only get paid when the deal closes.
Let Chris Kerth with Murphy Business sell you’re Business.