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1. Initial meeting(s) between the Business Owner (Seller) and the Business Team Broker is where the sell a business, company, or store process is explained. Our free valuation services are used to determine the value of the business and the various tax consequences are discussed. Our valuation is free if a Representation Agreement is signed, otherwise we charge $1,000.
2. A Representation Agreement is filled out by the Broker & signed by the Seller. Immediately after signing the representation Agreement, the Seller provides the Broker with the following:
a. Complete listing of all equipment and other assets to be included or excluded in the sale;
b. The last 3 years of Profit and loss statements, balance sheets, and tax returns of the Business;
c. If applicable, an interim profit and loss statement, balance sheet & sales tax report;
d. Real and personal property leases;
e. Copies of all patents, licensees, loan documents, contracts or agreements;
f. All agreements relating to employee benefits;
g. Any environmental reports; and
h. Copies of all other documents needed to present a fair and accurate description of the Business to prospective buyers.
3. Seller approves the terms under which the Broker will publish, advertise or distribute information about the Business, Company, or Store for sale to prospective purchasers and to cooperating brokers. Seller & Broker discuss and agree upon contacting landlords and any others regarding any of the information about the Business for sale.
4. Broker writes a narrative on the Business, the Representation Agreement is entered into the Business Team proprietary sell a business database and a Business Profile is created. Broker introduces the Business to all of our other brokers during the weekly Wednesday morning office meeting.
5. All other internal brokers match the Seller’s Business Data (SBD) against Buyer’s in their respective queues (buyers who have previously been interviewed; and signed a Confidentiality Agreement, an agency disclosure and a Buyer’s Profile); Broker and Business Team plan a sell a business advertising strategy; and the SBD is added to our own web site plus all major business brokerage web sites in such a manner as to prevent the general public from identifying the Business for sale.
6. Buyers in queue and buyers who have responded from the advertisements will have their backgrounds and finances evaluated to see if they are “real” buyers. If a “real” buyer is interested, they will be shown a Business Profile. If further interest is shown, the Seller’s Broker will arrange a meeting with the Seller.
7. If a buyer wants to make an offer at a fair price and proves they have the money necessary to make the purchase, the Buyer’s Broker will write the offer and secure a deposit.
8. The Seller’s Broker and when applicable, the Buyer’s Broker, will present the offer to the Seller.
9. Seller and Seller’s Broker will review the offer and decide whether to accept it or counter the offer. If Seller wants to counter, they can:
a. Mark up the original offer, initial the changes and sign the offer.
b. Sign the offer, check the counteroffer box on the offer and write-up a counteroffer.
c. Re-write the offer.
10. Once an offer is accepted, the Seller’s Broker will arrange a Seller/Buyer meeting where the Seller’s and Buyer’s Disclosure Statement is discussed, questions answered and the statement is signed by both parties.
11. Due diligence starts once an offer is accepted and the Seller’s and Buyer’s Disclosure Statement is completed.
a. If the due diligence proves the Business as represented, the Buyer signs the Conditions Removal.
b. If the due diligence did not prove the Business as represented, either the offer can be renegotiated or the offer will be cancelled & the Buyer’s deposit check will be returned.
c. If the due diligence proved the Buyer as represented (capable of managing the Seller’s business, financially capable and has good credit), the Seller signs the Conditions Removal.
d. If the due diligence did not prove the Buyer as represented, then the offer will be cancelled & the Buyer’s deposit check will be returned.
e. Once both the Buyer’s and Seller’s Conditions Removals are signed, the Seller’s Broker will open escrow or prepare to close the transaction.
12. Seller’s Broker secures answers and/or provides the following to the Independent Escrow company:
a. Copy of the Representation Agreement
b. Copy of the Purchase Agreement and Counteroffers
c. Copy of both Conditions Removals
d. Copy of the EDD & sales tax number and if applicable, liquor license
e. Seller(s) name, address, (other than Business address), Social Security Number, sales tax number, copy ABC license (if applicable) and federal tax number, if corporation.
f. Buyer(s) name, address, (other than Business address), Social Security-Number and federal tax number if corporation.
g. Turns over the deposit check from Buyer to the escrow company.
h. Secures leases – amount of monthly rental, security deposit, assignment, new lease, etc
i. Estimates closing date for closing, date of possession by Buyer and pro-ration date.
j. Investigates Insurance - will Buyer assume Seller’s or acquire new.
k. Taxes – Requests the Seller’s property tax bill for pro-ration.
l. Investigates required licenses – are they transferable?
m. If Buyer and/or Seller are a corporation - need names of the officer(s) authorized to sign and a copy of the Corporate Resolution authorizing the sale of the assets or stock.
13. How will purchase price be allocated?
a. Good will
b. Fixtures and equipment
c. Leasehold improvements
d. Covenant not to compete
e. Liquor license, if applicable
f. Furniture, Fixtures & Equipment
g. Inventory
14. Activities carried out by independent 3rd party escrow company for an asset sale:
a. Receives opening business escrow instruction
b. Prepares Escrow Instruction
c. Obtains signatures and Deposit money - no escrow processing will start until the deposit check clears
d. Orders Publication, Recording and Notify County Tax Collector (When ABC involved, prepares ABC package)
e. Orders UCC, Tax Liens & Judgment Search for State and County
f. Requests demands from existing lien-holders
g. Receives claims
h. Prior to the legal published closing date, does estimation of closing cost including estimated inventory and requests funds to close escrow from the Buyer
i. Prepares closing instruction one day prior to close of escrow.
j. obtains signatures on the closing instruction on the date of close of escrow
k. disburses money and paper work
15. Sell a business activities carried out by independent 3rd party escrow company or Business Team attorneys for a stock sale::
a. Orders UCC, Tax Liens & Judgment Search for State and County
b. Arranges for signature changes on banking accounts, if applicable - name changes on liability accounts and preparation of new stock certificates.
b. Prior to the closing date, does estimation of closing cost including estimated inventory and requests funds to close from the Buyer
c. Obtains signatures on the closing instruction on the date of close
d. Disburses money, stock certificates and paper work
16. ABC License through an escrow company
a. Immediately upon opening escrow request a certified copy of Notice to Creditors of Bulk Transfer and Notice of Intended Transfer of Liquor License
b. Seller to sign off at the local ABC.
c. Buyer to pick up ABC package from the local ABC and make an appointment for an interview
d. Escrow company prepares ABC package for Buyer to take to the interview
- Certified copy of Escrow Instruction
- Certified copy of Notice to Creditors
- Demand Note to replace cashier's check or Promissory Note
- Form 226
e. Notice is posted at the Business location for 30 days from the date of the interview
f. When all the terms and conditions are met and funds are deposited with escrow, escrow company will forward Form 226 to the local ABC, they then forward their package to Sacramento ABC (State office) and they transfer the license. From the time escrow forwards Form 226 to local ABC to actual transfer of the ABC license takes approximately 2 weeks.
17. Sell a business tax releases required before the Seller can receive all of their proceeds:
a. Certificate of Payment of Sales and Use Tax from State Board of Equalization
b. Certificate of Release from Employment Development Department.
c. Certificate of Release from the Franchise Tax Board for Corporations and LLC's.
Seller’s whole or partial net proceed will not be released until above Certificates are received by escrow holder.
For additional information regarding the Steps for Selling a Business, contact a Business Team broker or use our buying a business or selling a business online forms. |
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Business Team
The Largest Business Broker in the Western United StatesMatching Buyers & Sellers since 1981 • Buying and Selling Businesses Worldwide
Business Team is a unit of BTI Group and a member of the International Business Brokers Association and the California Association of Business Brokers. Business Team is the largest brokerage firm in the Western United States, with business brokers specializing in businesses for sale and selling businesses in Northern California, Southern California, Nevada, Missouri, and Washington, as well as, eCommerce and Internet businesses. Contact Business Team today!
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The information on this Website is compiled from a multitude of independent sources. Business-team.com does not guarantee the accuracy, truthfulness, completeness, timeliness or relevance of any items or claims on this site; nor has it made any investigation whatsoever into the information or advertising claims for any businesses, real estate, buyers, valuations, consultations, or other services or products which may be advertised or offered with the objective to sell a business. Potential buyers or sellers of the aforementioned should perform their own due diligence as to the accuracy of said information. Business Team recommends that Caveat Emptor - Buyer Beware.
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