BILL OF SALE BUSINESS

Since a business is not real property, you won't need a title policy, and you probably won’t need an attorney either.

If you have a straightforward cash transaction, this document and its attachments are all you will need. Download your copy today...it's free from this site.

The Bill of Sale of Business is the actual transfer document between buyer and seller. As such, it contains all of the information relative to what is being sold. It does not state the purchase price or terms and should only be executed during a cash purchase or when a promissory note has been executed.

In this form the seller warrants that all of the business fixtures, equipment, and inventory being transferred are owned free and clear and that the seller will defend against any and all claims against them.

When a business sells, part of the price is for fixtures, equipment, and inventory. The other part, sometimes known as "blue sky," is for good will. If the business is successful, it means that the proprietor has built up a good following, and thus owns "good will."

A buyer coming in will have the benefit of that good will at first, giving him or her time to build a new clientele or prove to the established customers that the products, service, etc. are as good as or better than ever. Meanwhile, the buyer could be in a precarious position if the seller decides to open a new business and go into competition nearby.

That's why the seller agrees to a "Covenant not to compete." It is a promise that he or she will not open a new business of the same nature within a set number of miles until after a specific date...thus giving the buyer time to build the business without undue competition.

The Bill of Sale for Business calls for a Schedule "A," which lists all of the physical property being transferred. This document should list every trade fixture, every piece of equipment, and a complete inventory of merchandise. Buyer and seller should go over this list together at the time of the transfer to verify that everything listed is, indeed, present. Then both should sign the lists to verify. Numerous lawsuits have been filed over disputes regarding these items. Putting the lists in writing protect both parties and prevent lawsuits.

BILL OF SALE BUSINESS