The final legal procedure by which a company changes hands is a business settlement or closing. Good settlement solicitors may be acquired to represent all parties and solve the final barriers.
After a buyer and seller have entered into a contract of sale there are then a number of conditions which must be met before the sale can be closed. These may address issues such as the assignment of lease, verification of financial statements, transfer of licenses or obtaining financing. The agreement will become invalid if these conditions are not met within the date specified.
A number of documents are also required to close a transaction. The purchase and sale agreement (discussed in ‘Making and evaluating offers’) is the basic document from which all these are drawn. These may include:
- A settlement sheet
- Bill of sale
- Promissory note
- Security agreement
- Promissory note
- Security agreement
- Financing statement
- Covenant not to complete
- Employment agreement
These are all documents a qualified accountant can help businesses to draft.