A business Bill of Sale is an official document that acknowledges the sale and change of ownership of a business and its accompanying assets. A Business Bill of Sale establishes the terms of the sale, details all the key information of the buyer, and acts as the prime record of the final transaction. The bill of sale includes the term of the sale, what is and what’s not included in the sale price, optional clauses and warranties to help protect both the buyer and the seller after the transaction has been completed. The business bill of sale can be used to buy or sell all sorts of businesses, including retail stores, eateries, service offices, restaurants, etc.
When do I need a Business Bill of Sale?
Business Bill of Sale is usually required whenever one is buying or selling a business. The state or local governments require this document as proof of ownership for licenses and other registration processes. Failure to use the Business Bill of Sale can lead to the ownership of the business being questioned or disputed, among other legal ramifications.
Who should use a Business Bill of Sale?
A Business Purchase Bill of Sale should be used by anyone who is looking to sell or purchase a business. The Bill of Sale can help specify the details of the sale, including what aspects of the business are to be sold, i.e., the shares and assets.
What are Assets and Shares in a Business Bill of Sale?
When one purchases the assets in a business, they are not purchasing the business itself; rather, they are purchasing one aspect of it. This may mean that they are purchasing the business’s products, their client list, or type of intellectual property. The business or company retains its liabilities, tax filings, and name. The assets being purchased may include:
- Goodwill and business name
- Business contracts
- Files, books, and records
- Confirmed sales orders
The assets being sold may, however, exclude:
- The accounts receivables
- Cash and bank balances
- Records of any excluded assets
Shares are units of equity ownership interest in a company or corporation that exists as a financial discipline providing for an equal distribution of their residual profits, if any are declared, in the form of dividends. When you purchase shares in a business or corporation, you will own all the attributes of that business or corporation.
Which Documents are Required During a Business Sale?
You will have to bring with you all the documentation that is related to your business before putting it up for sale. These may include:
- Insurance forms
- Nondisclosure forms
- A comprehensive record of all your assets
- List of all the employees and the payroll
- A manual operating of your business
- Current clients, suppliers, and distributors contracts
- Tax records for the past four years
- Pictures of your business
- Financial statements
A Business Bill of Sale Vs. A Sale or Purchase Agreement
Before selling your business, it is important to first know the difference between a Business Bill of Sale and a Sale or Purchase Agreement. The Business Bill of Sale is used to officiate or execute a sale and transfer of a business. The document outlines the terms of the business transaction at the time of the sale and officiates the business’s new ownership.
On the other hand, a sale or purchase agreement is used to negotiate future purchases or sales. This type of document is usually used in the initial stages of negotiation for securing the terms and assets of a business. However, the purchase or sale agreement is merely a draft or promise of the final transaction. It doesn’t officially recognize the ownership or transfer of a business.
Consider Using a Template
Bill of sale documents is common, meaning that you can easily find free templates online. Using a template, you will be able to feel more confident that your document includes all the required details for the business transaction.
Whether you decide on a pre-printed form or a print out of your own, make sure to retain a copy for your records.
Include the following:
- The name, contact information, and address of both the buyer and the seller
- The date of the sale
- The description of the business
- The purchase price
- Signatures of both parties involved
A bill of sale is designed to act as a contract for purchase between a buyer and a seller. In most cases, the bill of sale is legally binding if the sale follows the guidelines required in the state where the transaction of sale takes place. As long as the business’s name, the buyer and seller’s address, and the description and business documents are included, then the bill of sale is considered a legal document.
Business Bill of Sale Templates
Selling a business can be a tough job. But with proper forms and documents, the life of any businessman can be a bit easy. One such form is the Business Bill of Sale document. This form can be used to record all the transaction details in an organized and systematic way. There are also other key aspects that you should consider while doing your paperwork for the business sale. In order to make sure that you have included all the information needed to officiate the transaction, download our free or premium business bill of sale templates today to get started!
How to fill out a Business Bill of Sale?
When you are looking to sell your business, it is important to learn how to fill out your Bill of Sale. Here are some of the information that you will need when filling in the document:
- The date of sale
- The buyer’s name and address
- The name of and address of the seller
- The business name and;
- State of corporation
- The assets, personal property, shares, and other interests included with the company
- The businesses’ headquarters
- The purchase price
- The date the cash is to be transferred
- Signatures and the date of the transaction from both the buyer and the seller
- The witness name, dates, and signatures
- Certificate of purchase recognition from your attorney or public notary
Frequently Asked Questions
A bill of sale is a pretty straight forward document that any person can handle. Here are the steps to follow to make your bill of sale:
Find your state’s requirements
Some states have regulations on some transactions which require the bill of sale. In most cases, however, you will need a bill of sale when you are looking to sell your business. To ensure that you are protected and that you are fully compliant with the law, go through your state’s requirement of the bill of sale.