A business bill of sale is a document that legally transfers ownership of a business from the seller to the buyer. It also records specific details about what is included in the sale, the date of the sale, and the sales price. Here’s a deep dive into what every bill of sale for a business must include.
What is a Business Bill of Sale?
Depending upon the type of business and transaction, a bill of sale may be very simple or extremely intricate. It is important to note that it is not the same as a purchase agreement. Whereas the purchase agreement lays out the proposed terms of the sale, the bill of sale confirms the transfer of the business and its assets. It can help to think of the purchase agreement as a draft that includes any conditions that must be met before finalizing the sale.
Items included in a business bill of sale vary depending on how the buyer acquires the company. There are two main ways a buyer acquires a business.
Asset vs. Stock Sale
The type of sale is often dependent on the type of business. Retail, restaurants, and other small businesses that are not fully formed S-Corporations or C-Corporations are sold in asset sales.
An asset sale includes the purchase of the assets and some of the liabilities of a company. This can consist of equipment, inventory, leaseholds, trade secrets, telephone numbers, licenses, etc. Sole proprietorships, partnerships, and LLCs can only structure the transaction as an asset sale. According to some reports, approximately 70% of business sales are asset sales.
A stock sale involves the purchase of stocks from a shareholder; thereby, the buyer obtains ownership. In many cases, a stock sale will involve assets and liabilities. However, any assets and liabilities that the buyer does not want will need to be otherwise distributed or paid off. It is estimated that 30% of businesses sold are stock sales.
There are standard items to include and other items that must be included to comply with state or local laws.
- Date of the Sale
- Name and Address of Buyer and Sell
- Business Details
- Physical Address of Headquarters
- State of Incorporation
- Shares or Interests
- Business Purchase Price
- Date Money is Transferred
- Signatures with Dates
- Notary Witnesses
Your business broker will help you with your bill of sale, ensuring that it includes all necessary details and information and complies with local and state business sale laws.
Get Help Buying or Selling a Business in Oregon
If you’re ready for the next stage in life and want to buy or sell a business in Oregon, Northwest Business Sales and Appraisals can help. Under the leadership of Patrick Bice, licensed Oregon Business Broker, Certified Business Intermediator, and Business Certified Appraiser, Northwest Business Sales & Appraisals has helped thousands of business buyers and sellers in Oregon. To learn more or schedule a consultation, call 541-968-2728 or send us a message.