Using Bulk Sales Services When Buying Or Selling A California Small Business

The final part of the whole deal is the escrow

. The word is an old Anglo-French word which originally meant piece of parchment or fabric. In todays parlance, the word describes the process whereby a property is deposited with a third party to be transferred to the grantee (buyer), when certain conditions are met. Who utilizes the services of an escrow, bulk sale service? California business brokers, business owner/sellers, business buyers, and other professional intermediaries.

There is a lot of paperwork involved in buying a business or selling a small business. It can be a daunting task, just from the paperwork alone. It can also be very stressful. An escrow officer specializes in handling these things and ensures that the buyer gets everything he or she is buying, with no hidden debts on the business and that the seller gets what was agreed on in a business for sale transaction.

The things to know about escrow procedures with regard to a business is that it differs from a real estate escrow in the following areas:

1.) Date specified in escrow instructions for a bulk sale and business is "on or after" the specified date. In real estate, the term used is "on or before".

2.) When the seller is paying all or a part of the escrow fee, a deposit from the seller is required as well as the buyers deposit. Costs usually are split unless parties agree to another arrangement.

3.) If the sale in any way includes a liquor license, then all the money, including what is being paid for the liquor inventory, must go through escrow. Also, no funds can be released before the escrow is closed.

4.) Finally, instructions concerning the escrow and bulk sale process must be written and signed by all parties, and all initial deposits made before the notice of sale can be published. When the notice of sale has been published and recorded, there is a 12-day minimum period--not including holidays and weekends--in which any creditors of the seller can file claims with the escrow company. If the business being sold includes the transfer of a liquor license, the time is extended.

A list of California escrow and bulk sale services can be found in the BizBen site's Resource Directory of services to assist in buying and selling California businesses.

by: Peter Siegel, MBA

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