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Business Escrow Checklist in California

Written By: Harpreet Singh
Dec 1, 2012
Article #261


Western Singh Business Brokers

 

BUSINESS ESCROW CHECKLISTS

Checklist of Tasks for Buyer

The following is a suggested list of issues to address for the escrow buyer.  This checklist is for informational purposes only, and may or may not be complete.  Escrow instructions will take priority over this list.
 

  • Agree on the terms of the transaction – sales price, down payment, financing, initial deposit, etc.
  • Record inventory of all furniture, fixtures and equipment at the premises being conveyed in the sale, including any vehicles.  Identify any equipment that is leased, and any outstanding loans.
  • Obtain the name, address, telephone number, and corresponding account numbers of the landlord and other relevant parties.
  • Open Escrow – sign escrow instructions and preliminary documents for filing/publication.
  • If a liquor license in involved, make application to the Department of Alcoholic Beverage Control for transfer of the liquor license.  The ABC will require a certified copy of the Recorded Notice to Creditors of Bulk Sale and the Intention to Transfer liquor license AND a certified copy of the Escrow Instructions.
  • File Fictitious Business Name Statement to open business account with the bank.  Filing may be done by escrow.
  • Prepare and submit financial statement to the landlord for a new lease or lease assignment, if required by the landlord.
  • Contact lenders about necessary financing if needed, and get a tentative commitment.
  • Obtain a city business license.
  • Contact the Fire Department and Health Department in order to obtain permits for subject premises.
  • Obtain an application from the Department of Benefit Payments for registration number to pay unemployment insurance, State Disability Insurance and State Income Tax withholding, if applicable.
  • Contact the State Board of Equalization to ascertain amount of deposit needed for sales tax account.
  • At the time possession date has been established, contact utility companies to transfer utilities from Seller’s Name into Buyer’s Name.  Contact the telephone company for a “Request for Supersedure” which allows the buyer to retain the same phone number.  Seller and buyer both must sign.

 

Checklist of Tasks for Seller

The following is a suggested list of issues to address for the escrow seller.  This checklist is for informational purposes only, and may or may not be complete.  Escrow instructions will take priority over this list.
 

  • Agree on the terms of the transaction – sales price, down payment, financing, initial deposit, etc.
  • Record inventory of all furniture, fixtures and equipment at the premises being conveyed in the sale, including any vehicles.  Identify any equipment that is leased, and any outstanding loans.  Approve the list and submit when opening escrow.
  • Obtain the name, address, telephone number, and corresponding account numbers of the landlord and other relevant parties.
  • Open Escrow – sign escrow instructions and preliminary documents for filing/publication.
  • If a liquor license in involved, make application to the Department of Alcoholic Beverage Control for transfer of the liquor license.  The ABC will require a certified copy of the Recorded Notice to Creditors of Bulk Sale and the Intention to Transfer liquor license AND a certified copy of the Escrow Instructions.
  • Contact the California State Board of Equalization regarding the close out of escrow on the location being sold and obtain escrow tax release, prior to closing out escrow.  This release will show: proof of having paid sales tax on fixtures and equipment conveyed in the sale; proof of paid sales tax on goods sold up to date of possession.
  • Provide to the buyer copies of any equipment lease contracts, name and address of insurance carriers.
  • If you are a corporation, obtain corporate resolution authorizing the sale of the corporate assets and designate authorized signature(s).
  • Contact the telephone company for a “Request for Supersedure” which allows the buyer to retain the same phone number.  Seller and buyer both must sign.

 

 

 Why Choose Us to Sell Your Business ?

-> Get access to 10,000+ registered Buyers looking to buy local businesses for sale.

-> Our Multi-Marketing Approach to reach each and every kind of the Buyer type.

-> Get 3x Times More Buyer Traffic then other Business Brokers. 

-> Get access to buyer base of our Nationwide Business Brokers Affiliates.

-> Get Higher Market Price and More Money in Your Pocket (if have proper documentation).

-> Work with Full Time Business Broker commited to his industry, Not with House selling Realtors. 

 

Search Local Businesses for Sale at:

http://CaliforniaBusinessSale.com

 

Member of :

CALIFORNIA ASSOCIATION OF BUSINESS BROKERS

Office: 1119 Kansas Ave, Modesto, CA 95351 

Ph: (209) 740-7443 | Fax(888) 589-7559 | hsingh@westernsingh.com

CA DRE # 01853724, CA DRE # 01904645

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