The Bulk Sales Process: Closing a Business Sale in California
The Bulk Sales Process: Closing a Business Sale in California
Some people think that selling a business means filling out some paperwork and walking away with a check. But in reality, closing a business sale is very similar to closing a real estate transaction in that escrow is often involved.
In the state of California, most small business sales utilize escrow and go through the Bulk Sales Process. If you’re considering selling your business, here’s what you need to know.
The main reason the bulk sale process exists is to help ensure the buyer’s protected, and escrow is utilized to follow the items agreed to in the sales agreement.
Escrow provides necessary business closing transaction services for buyer and seller. Escrow companies handle the bulk sale process, including:
- Requesting clearances from state agencies
- Notifying creditors
- UCC search- order payoffs if needed
- Prepare escrow instructions- bill of sale, note and security agreement if needed
- Requesting closing funds from buyer
Escrow is set up separately for the business, its real estate, and any liquor licenses. Separate escrow arrangements are made for the business being sold, for any real estate parcels attached to it, and – if it involves a restaurant or bar – for any liquor licenses it holds.
The main thing for buyer and seller to understand is that following the California Bulk Sales Process and opening up escrow can help them reach the end of their business sales transaction successfully.
