Updated on November 10th, 2022
A business bill of sale is a form that transfers an individual’s ownership of a company to a buyer in exchange for payment. The document is kept for the buyer’s records, allowing them to prove that they are now the rightful owner should the need arise. It can be used in conjunction with business sales of any structure, including partnerships, sole proprietorships, LLCs, corporations, and non-profits.
What is a Business Bill of Sale?
A business bill of sale is evidence that a person transferred their ownership in a business to another party. Depending on the structure of the company, this can include the transfer of shares, stocks, or the company as a whole. This also includes the assets of the company, which can make up a significant portion of the business’ value.
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BUSINESS BILL OF SALE
1. PARTIES. This document is between [BUYER NAME] with a street address of [BUYER ADDRESS] (Hereinafter known as the “Buyer”) and [SELLER NAME] with a street address of [SELLER ADDRESS] (Hereinafter known as the “Seller”).
2. BUSINESS. The Seller acknowledges they have the right to sell the business entity known as [BUSINESS NAME] incorporated in the State of [STATE] with a principal office located at [INCORPORATION ADDRESS] along with all its assets, shares, ownership interest, personal property, employees, leases, contracts, trademarks, copyrights, and any other tangible or intangible interest (Hereinafter known as the “Business”).
3. PURCHASE PRICE. The Buyer and Seller agree to a purchase price of $[PURCHASE PRICE] (US Dollars) to be acceptable for the sale of the Business. The Buyer agrees to make the funds available on the day of the transfer of the Business on [MM/DD/YYYY]. Before, during, and after the sale, the Seller agrees to do everything in their power to educate the Buyer about the practice of the Business.
Buyer’s Signature: ____________________ Date: [MM/DD/YYYY]
Printed Name: [BUYER NAME]
Seller’s Signature: ____________________ Date: [MM/DD/YYYY]
Printed Name: [SELLER NAME]
Business Bill of Sale vs. Purchase Agreement
A business bill of sale and a purchase agreement are both used during the transaction but at different steps in the selling process. A business purchase agreement is created with the purpose of establishing the key terms and conditions of the sale, which will be negotiated by the parties before it is signed. Once the purchase agreement is signed, any conditional matters outlined in the agreement must be met by both parties, such as the completion of consent and approval forms, providing estoppel certificates, and allowing the buyer to access the premises and records of the company.
After the selling conditions have been met and money has changed hands, a bill of sale can be used to document the transaction, and a copy can be kept for the parties’ records.
How to Use?
The bill of sale is used at the end of the selling process after the parties have sorted out the financials and their plan for transitioning ownership. For businesses that require a significant amount of inside knowledge to manage, the buying party will often require that the seller remain in an advisory role to mentor and guide them for the first few months (up to a year) after the purchase.
Completing the bill of sale is one of the easiest steps, as the form is short and can be filled out and signed in a matter of minutes. To complete the form, the parties must perform the following steps:
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1. Provide the Names of the Buyer and Seller
At the top of the document, enter the date the parties will be signing the form. Then, in the proceeding eight (8) fields, provide the buyer and seller’s full names and addresses.
2. Specify the Business Details
Enter the company’s official name, followed by the state in which it was incorporated and its principal address.
3. List the Purchase Price
Enter the total amount ($) the buyer will be paying for the business. Then, type the day, month, and year in which the money will exchange hands.
4. Sign the Form
The buyer and seller must sign and print their names onto the document for it to be official. Although not mandatory, the parties should have their signatures witnessed and/or notarized. This proves the signatures of both parties are real and that they both understood what they were signing.