Closing Escrow on Business Buying/Selling
ByWillard Michlin
Posted Date: Monday, October 15, 2007 | Viewed: 107
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 today’s 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.
There is a lot of paperwork involved in buying and selling a 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 their money.
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:
a) Date specified in escrow instructions for a business is ‘on or after’ the specified date. In real estate, the term used is ‘on or before’.
b) When the seller is paying all or a part of the escrow fee, a deposit from the seller is required as well as the buyer’s deposit. Usually the costs are split, but it is whatever the parties agree to.
c) 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.
d) Finally, Instructions must be written and signed by all parties along with all initial deposits 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, which does not include 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, then the time is extended.
Willard Michlin is a Business Broker, California Real Estate Broker, Accountant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net. See other articles by Willard Michlin at http://www.kismetbusinessbrokers.com
Related Articles on Entrepreneurialism
- Body Shop - How to Appraise
by Willard Michlin
“How do I appraise a body shop?” is an often-asked question in the automotive industry. Finally, the... - Body Shop - Is This a Good Time to Sell?
by Willard Michlin
When is a good time to sell my body shop business? This article answers this question and more.... - Buying A Business - The Basics
by Willard Michlin
This article discusses the basics of buying a business in today’s market.... - Due Diligence 101 Or What You Don't Know Can Kill You!
by Willard Michlin
This article covers, in detail; exactly what due diligence is all about and how to really make sure ... - Financing a Business
by Willard Michlin
The simple ABC of what financing a business is all about, and what are the best sources. No hype, ju... - How Is the Value of a Business Worked Out?
by Willard Michlin
Did you ever wonder how the value of a business is worked out? Read on and find out!... - If You Don't Ask, The Answer Is Always No
by Willard Michlin
There is an old saying that is very true even today. It gives quite an interesting insight into the ... - Sanity Check - Buying a Business
by Willard Michlin
Does the purchase price being asked for make sense? This article helps you answer this question in d... - What to Look at When Buying a Body Shop
by Willard Michlin
So you think you want to buy a body shop? This article is a MUST, if you are so inclined! ... - Why Are Non-disclosure Agreements Used When Selling a Business?
by Willard Michlin
What is a non-disclosure agreement for a business and why the heck do I have to sign one?... - Phone Dating (Phone Chat) Business Basics
by David Beyer
This article gives a brief background on the phone dating (phone chat) industry and what new clients... - Limiting Business Risks And Reaching For Success
by Nazeer Daud
Entrepreneurialism in business is the driving force behind success. While everyone may naturally as... - Why Business Franchising Is A More Popular Investment Choice For Banks
by Nazeer Daud
Critical to starting a business is having the appropriate finance in place, and money alone is the n... - Key Business Franchising Contract Terms
by Nazeer Daud
Business franchising agreements are commonplace, and tens of thousands of these contracts are signed... - Raising Capital For Business Startup
by Nazeer Daud
Raising capital for a business startup is one of the most difficult business tasks you’ll experience... - The Business Limitations To Entrepreneurialism
by Nazeer Daud
From a business perspective, entrepreneurialism is vital to commercial success and the health of the... - Quitting Employment For Business
by Nazeer Daud
Quitting stable employment for business is a brave move, but one that all entrepreneurs will have to... - Igniting Your Business Spark
by Nazeer Daud
Entrepreneurialism and business go hand in hand, and igniting your initial business spark and passio... - MLM Truth -or- Scam?
by Ralph Henry
If your reading this article you probably are wondering is MLM, Network Marketing a Big Scam? Be you... - Finding Something That Works
by Lynn Shea
Starting your own business can be hard, weather it is a home base business, or otherwise.You paitenc...
