Pre-Closing Check List For Arizona Business Sellers Or Owners

Please find below a simple check list of some of the major items that a small business owner or seller should address or consider before the close of escrow on a small business purchase or transfer. Click on the highlighted links for additional info and relevant forms.

• Buyer Due Diligence Completed & Contingencies To Contract Removed: The Seller has promptly provided all requested due diligence information to Buyer and his advisers for review and approval. Seller should seek signed release or statement from Buyer indicating that all (or in some cases most) of the contingencies or conditions to the contract have been satisfied.

• Lease Assignment: At the appropriate time, the Seller has notified Landlord of pending business sale or transfer and has requested required information to facilitate approval of a lease assignment to Buyer. Seller has advised Buyer of lease assignment requirements ASAP.

• Equipment Lease Assignments Or Payoffs:  If applicable, and according to the terms of the purchase contract, Seller should provide to the listing Broker and escrow company any and all information regarding vehicle and equipment lease payoffs or transfers.

•  Inventory Check: If applicable, or included in the terms of purchase agreement, Seller and Buyer should arrange inventory check either prior too, or immediately after close of escrow.

• Utilities & Telephone Services Transfer: Prior to closing, the Seller should should consult with Buyer to arrange all necessary utilities transfers including telephone services.

• Accounts Receivable, Accounts Payable, Work In Progress: If applicable, or if not already addressed in the purchase agreement, Seller and Buyer should have a clear understanding regarding ownership of these items.  The Seller should also make arrangements with Buyer regarding the collection and forwarding of accounts receivable funds due to Seller after closing.

• Pro Rations Of Rent, Wages, Deposits: Determine and advise the Broker & escrow company of any potential pro rations that need to be settled at close of escrow including rent, employee wages, vacation time, lease deposits, taxes, etc.

• UCC Lien & Judgment Search: If applicable, Seller has provided the necessary information to the broker or escrow company to clear, release, or pay off any liens and judgments on or before the closing day.

• Allocation Of Purchase Price: Prior to closing , The Seller and Buyer should come to an agreement regarding the allocation of the purchase price of the target business. If not already previously agreed upon in the purchase agreement, The Seller should consult their accountant or CPA if they have any questions regarding the allocation. Click here to print a blank allocation form

• Closing Statement & Documents: Seller may want to request a copy of closing statement, or closing documents from the escrow company or broker a few days prior to closing date to review.

• Promissory Note Servicing:  If applicable, Seller may want to consult with Buyer regarding if they want to have the promissory note payments due the Seller serviced by an escrow company, or handle them privately.

• Post Closing Buyer Training & Familiarization: Prior to closing, The Seller and Buyer should discuss the schedule of the business familiarization or training period for the Buyer, as well as an introduction to the employees of business after the close of escrow.

• Closing Day: Seller and Buyer to attend closing and sign business transfer documents. Seller  must bring picture ID to confirm identity with escrow officer.